Full text of "Records and briefs of the United States Circuit Court of Appeals for the Ninth Circuit"

See other formats

Form No.

San Francisco

Law Library

Presented by

EXTRACT FROM BY-LAWS

Section 9. No book shall, at any time, be taken from the
Library Room to any other place than to some court room of a
Court of Record, State or Federal, in the City of San Francisco,
or to the Chambers of a Judge of such Court of Record, and
then only upon the accountable receipt of some person entitled
to the use of the Library. Every such book so taken from the
Library, shall be returned on the same day, and in default of
such return the party taking the same shall be suspended from
all use and privileges of the Library until the return of the book
or full compensation is made therefor to the satisfaction of the
Trustees.

Sec. 11. No books shall have the leaves folded down, or be
marked, dog-eared, or otherwise soiled, defaced or injured. Any
party violating this provision, shall be liable to pay a sum not
exceeding the value of the book, or to replace the volume by a
new one, at the discretion of the Trustees or Executive Commit-
tee, and shall be liable to be suspended from all use of the
Library till any order of the Trustees or Executive Committee
in the premises shall be fully complied with to the satisfaction
of such Trustees or Executive Committee.

IL.COX 4 CO.

-f-te&f}- No. 3679

©front (Emtri of Apprala

3?nr tift Ntntlj Gtorrott.

LOUIS CABIALE and ANDREW DONIZELLO,

Plaintffs in Error,

vs.

THE UNITED STATES OF AMERICA,

Defendant in Error.

Umwtftft of %Ltmtb.

Upon Writ of Error to the Southern Division of the

United States District Court of the

Northern District of California,

First Division.

FILED

qfd I 6 192!

F D. MONCKTON,

CL»MC

Filmer Jirog. Co. Print, 330 Jackson St., S. W.. Oat.

Digitized by the Internet Archive

in 2011 with funding from

Public.Resource.Org and Law.Gov

http://www.archive.org/details/govuscourtsca9briefs1291x

No. 3679

Itttfr h &tat*0

©trrmt (Emtri nf Appeal*

Jnr % Sfatflf CKwtttt.

LOUIS CABIALE and ANDREW DONIZELLO,

Plaintffs in Error,

vs.

THE UNITED STATES OF AMERICA,

Defendant in Error.

Qfomaaript nf Srairfr

Upon Writ of Error to the Southern Division of the

United States District Court of the

Northern District of California,

First Division.

Filmer Bros. Co. Print, 330 Jackson St., S. F., Cal.

INDEX TO THE PRINTED TRANSCRIPT OF

RECORD.

[Clerk's Note: When deemed likely to be of an Important nature,
errors or doubtful matters appearing In the original certified record are
printed literally in italic; and, likewise, cancelled matter appearing in
the original certified record is printed and cancelled herein accord-
ingly. When possible, an omission from the text is indicated by
printing in italic the two words between which the omission seems to
occur.]

Page
Affidavit of S. V. Thomas Attached to Motion

for New Trial 110

Assignment of Errors 12.0

Bill of Exceptions 28

Certificate of Clerk U. S. District Court to

Transcript of Record 132

Citation on Writ of Error 136

Information 2

Judgment 115

Judgment on Verdict of Guilty 117

Minutes of Court— July 31, 1920— Pleas 22

Minutes of Court— September 21, 1920— Trial. . 23
Minutes of Court— September 22, 1920— Trial

(Continued) 25

Minutes of Court — October 2, 1920 — Judgment . 115
Minutes of Court— October 6, 1920— Order

Allowing Writ of Error 130

Motion for New Trial 108

Motion in Arrest of Judgment 114

.Names and Addresses of Attorneys of Record . . 1
Order Allowing Writ of Error 131

ii Lotus Calnale and Andrew Donizello

Index. Page

Order Extending Time to and Including De-
cember 15, 1920, to File Record and Docket

Cause 138

Order Extending Time to and Including Feb-
ruary 1, 1921, to File Record and Docket

Cause 139

Order Extending Time to and Including March

1, 1921, to File Record and Docket Cause. . 140
Order Extending Time to and Including April

1, 1921, to File Record and Docket Cause.. 142

Petition for Writ of Error 118

Pleas 22

Praecipe for Transcript on Writ of Error .... 1
Return to Writ of Error 135

TESTIMONY ON BEHALF OF THE GOV-
ERNMENT:

DREW, H. C. (Recalled in Rebuttal) .... 88

Cross-examination 89

DREW, HARRY Z 54

Cross-examination . . f 55

ESTELLE, A. L 57

Cross-examination 58

HARDIE, A. M 59

JORDAN, WILLIAM J 51

Cross-examination 53

Recalled in Rebuttal 89

KUPSER, H. M 39

Cross-examination 42

LOVE, R. F 60

Cross-examination 61

Redirect Examination 62

vs. The United States of America. iii

Index. Page

TESTIMONY ON BEHALF OF THE GOV-
ERNMENT—Continued :

POULTNEY, GEORGE 29

Cross-examination 31

Redirect Examination 34

Recalled 59

Recalled in Rebuttal 87

SHAEN, SAMUEL 45

Cross-examination 47

Redirect Examination 49

Recross-examination 49

SHURTLEFF, A. R 35

Cross-examination 37

Redirect Examination 39

Recalled 63

SMITH, W. D 43

Cross-examination 44

Recalled in Rebuttal 88

Cross-examination 88

TESTIMONY ON BEHALF OF DEFEND-
ANTS:

BATTAGLIA, GUIDO 84

Cross-examination 85

BERTOLOTTI, G 82

CABIALE, LOUIS 68

Cross-examination 74

CESANA, ALBERTO 85

Cross-examination 85

COPPOLA, FRANK 76

Cross-examination 76

DONIZELLO, ANDREW 80

iv Louis Cabiale and Andrew Donizello

Index. Page

TESTIMONY ON BEHALF OF DEFEND-
ANTS—Continued :

Cross-examination 82

FORASIEPI, DANTE 78

Cross-examination 78

GAB ALIO, PETER 79

Cross-examination 79

PORCELLINI, ATTILIO 83

Cross-examination 84

RATTO, E. M 85

Cross-examination 86

SMITH, W. D. (Recalled) 67

ZURICH, PETER 77

Cross-examination 77

Redirect Examination 77

Recross-examination 77

Trial 23

Trial (Continued) 25

Verdict 107

Writ of Error 133

Names and Addresses of Attorneys of Record.

For Defendants and Plaintiffs in Error:

CHAUNCEY F. TRAMUTOLO, Esq., San
Francisco.

For Plaintiff and Defendant in Error :

U. S. ATTORNEY, San Francisco, Calif.

UNITED STATES OF AMERICA.

District Court of the United States, Northern Dis-
trict of California.

No. 8602.

CLERK'S OFFICE.

UNITED STATES OF AMERICA

vs.

LOUIS CABIALE et al.

Praecipe for Transcript on Writ of Error.

To the Clerk of Said Court:

Sir: Please prepare transcript on writ of error,
and include the following papers and proceedings:

Information.

Minutes of July 31, September 21, 22, October 2,
6, 1920.

Verdict.

Motion for New Trial.

Motion in Arrest of Judgment.

Judgment.

Petition for Writ of Error,

Order Allowing Writ of Error,

2 Louis Cabiale and Andrew Donizello

Assignment of Errors,

Bill of Exceptions.

Original Writ of Error,

Original Citation on Writ of Error.

This Praecipe.

C. F. TRAMUTOLO,
Attorney for Defendants.

[Endorsed] : Filed Mar. 17, 1921. W. B. Maling,
Clerk. By C. M. Taylor, Deputy Clerk. [1*]

In the Southern Division of the District Court of
the United States, Northern District of Cali-
fornia, First Division.

No. 8602.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

LOUIS CABIALE, ANDREW DONIZELLO,
PIETRO GABALIO, G. BERTOLOTTI,
PETER ZURICH, ATTILIO PARCEL-
LING FRANK COLAI and DANTE FOR-
ASIEPI,

Defendants.

Information.

At the July term of said court, in the year of our
Lord one thousand nine hundred and twenty.
BE IT REMEMBERED that Frank M. Silva,

*Page- number appearing at foot of page of original rertiflwl Transcript
of Record.

vs. The United States of America, 3

United States Attorney for the Northern District
of California, by and through Albert M. Hardie,
Assistant United States Attorney, who for the United
States in its behalf prosecutes in his own proper
person, comes into court on this, the 29th day of
July, 1920, and with leave of said Court first having
been had and obtained, gives the Court to under-
stand and be informed as follows, to wit: That the
allegations hereinafter set forth, each of which your
informant avers and verily believes to be true, are
made certain and supported by a special affidavit
made under oath, and that this information is based
upon said affidavit, which said affidavit is hereto at-
tached and made a part hereof;

NOW THEREFORE, your informant presents:
THAT Louis Cabiale, Andrew Donizello, Pietro
Gabalio, G. Bertolotti, Peter Zurich, Attillio Par-
celling Frank Colai and Dante Forasiepi, herein-
after [2] called the defendants heretofore, to wit,
on the 22d day of July, 1920, at 1549 Stockton Street,
in the city and county of San Francisco, in the
Southern Division of the Northern District of Cali-
fornia, after the date upon which the Eighteenth
Amendment to the Constitution of the United States
went into effect, did unlawfully, wilfully and know-
ingly, in violation of Section 21, Title II of the Act
of October 28th, 1919, known as the National Pro-
hibition Act, maintain a common nuisance in that
they did unlawfully, wilfully and knowingly keep on
the premises situated at said 1549 Stockton Street
known as the Gianduja Hotel, Restaurant, Cafe and
Bar certain intoxicating liquor, to wit, claret wine

4 Louis Cdbiale and Andrew Donizello

containing one-half of one per cent or more of al-
cohol by volume, which said liquor was then and
there fit for use for beverage purposes.

AGAINST the peace and dignity of the United
States of America and contrary to the form of the
statute of the said United States of America in such
case made and provided.

SECOND COUNT.

And affiant further gives the Court to understand
and be informed as follows, to wit:

That the allegations hereinafter set forth, each of
which your informant avers and verily believes to
be true, are made certain and supported by a special
affidavit made under oath and that this information
is based upon said affidavit, which said affidavit is
hereto attached and made a part hereof.

NOW THEREFORE, your informant presents,
THAT Louis Cabiale, Andrew7 Donizello, Pietro
Gabalio, G. Bertollotti, Peter Zurich, Attilio Par-
cellini, Frank Colai and Dante Forasiepi, herein-
after called the defendants heretofore, to wit, on the
22d day of July, at 1549 Stockton Street, in the
County of San Francisco, in the Southern Division
of the Northern District of California, then and
there being, after the date upon which the 18th
Amendment to the Constitution of the United States
went into effect, unlawfully, [3] wilfully and
knowingly, in violation of Section 3, Title II, of the
Act of October 28, 1919, known as the National Pro-
hibition Act, have in their possession certain intox-
icating liquor, to wit, claret wine, containing one-
half of one per cent or more of alcohol by volume,

vs. The United States of America. 5

which said liquor was then and there fit for use for
beverage purposes.

AGAINST the peace and dignity of the United
States of America and contrary to the form of the
statute of the said United States of America in such
case made and provided.

THIRD COUNT.

And affiant further gives the Court to understand
and be informed as follows, to wit:

That the allegations hereinafter set forth, each of
which your informant avers and verily believes to be
true, are made certain and supported by a special
affidavit, made under oath and that this informa-
tion is based upon said affidavit, which said affidavit
is hereto attached and made a part hereof.

NOW THEREFORE, your informant presents:
THAT Louis Cabiale, Andrew Donizello, Pietro
Gabalo, G. Bertollotti, Peter Zurich, Attilio Parcel-
lini, Frank Colai and Dante Forasiepi hereinafter
called the defendants heretofore to wit, on the 22d
day of July, 1920 at 1549 Stockton Street in the city
and county of San Francisco in the Southern Divi-
sion of the Northern District of California, then
and there being, after the date upon which the 18th
Amendment to the Constitution of the United States
went into effect, did then and there unlawfully, wil-
fully and knowingly in violation of Section 3, Title
II of the Act of October 28, 1919, known as the Na-
tional Prohibition Act, sell certain intoxicating
liquor, to wit, claret wine, containing one-half of one
per cent or more of alcohol by volume and then and
there fit for use for beverage purposes. That the

6 Louis Oabiale and Andrew Donizello

sale of the said intoxicating liquor by the said de-
fendants at [4] the time and place aforesaid was
then and there prohibited and unlawful and in viola-
tion of Section 3 of Title II of the Act of Congress
of October 28, 1919, to wit, the " National Prohibi-
tion Act."

AGAINST the peace and dignity of the United
States of America and contrary to the form of the
statute of the said United States of America in such
case made and provided.

FOURTH COUNT.

And affiant further gives the Court to understand
and be informed as follows, to wit :

That the allegations hereinafter set forth, each of
which your informant avers and verily believes to
be true, are made certain and supported by a special
affidavit, made under oath and that this information
is based upon said affidavit, which said affidavit is
hereto attached and made a part hereof.

NOW THEREFORE, your informant presents:
THAT Louis Cabiale, Andrew Donizello, Pietro
Gabalo, G. Bertollotti, Peter Zurich, Attilio Par-
cellini, Frank Colai and Dante Forasiepi hereinafter
called the defendants heretofore to wit, on the 22d
day of July, 1920 at 1549 Stockton Street in the city
and county of San Francisco in the Southern Divi-
sion of the Northern District of California, then and
there being, after the date upon which the 18th
Amendment to the Constitution of the United States
went into effect, did then and there unlawfully, wil-
fully and knowingly in violation of Section 3, Title
II of the Act of October 28, 1919, known as the Na-

vs. The United States of America. 7

tional Prohibition Act, sell certain intoxicating
liquor, to wit, claret wine, containing one-half of one
per cent or more of alcohol by volume and then and
there fit for use for beverage purposes. That the
sale of the said intoxicating liquor by the said de-
fendants at the time and place aforesaid was then
and there prohibited and [5] unlawful and in
violation of Section 3 of Title II of the Act of Con-
gress of October 28, 1919, to wit, the "National Pro-
hibition Act."

AGAINST the peace and dignity of the United
States of America and contrary to the form of the
statute of the said United States of America in such
case made and provided.

FIFTH COUNT.

And affiant further gives the Court to understand
and be informed as follows, to wit:

That the allegations hereinafter set forth, each of
which your informant avers and verily believes to
be true, are made certain and supported by a special
affidavit, made under oath and that this information
is based upon said affidavit, wThich said affidavit is
hereto attached and made a part hereof.

NOW THEREFORE, your informant presents:
THAT Louis Cabiale, Andrew Donizello, Pietro
Gabalo, G. Bertollotti, Peter Zurich, Attilio Parcel-
ling Frank Colai and Dante Forasiepi hereinafter
called the defendants heretofore to wit, on the 22d
day of July, 1920, at 1549 Stockton Street in the city
and county of San Francisco, in the Southern Divi-
sion of the Northern District of California, then and
there being, after the date upon which the 18th

8 Louis Cabiale and Andrew Vonizello

Amendment to the Constitution of the United States
went into effect, did then and there unlawfully, wil-
fully and knowingly in violation of Section 3, Title
II of the Act of October 28th, 1919, known as the
National Prohibition Act, sell certain intoxicating
liquor, to wit, claret wine, containing one-half of one
per cent or more of alcohol by volume and then and
there fit for use for beverage purposes. That the
sale of the said intoxicating liquor by the said de-
fendants at the time and place aforesaid was then
and there prohibited and unlawful and in violation
of Section 3 of Title II of the Act of Congress of
October 28, 1919, to-wit, the " National Prohibition
Act." [6]

AGAINST the peace and dignity of the United
States of America snd contrary to the form of the
statute of the said United States of America in such
case made and provided.

SIXTH COUNT.

And affiant further gives the Court to understand
and be informed as follows, to wit :

That the allegations hereinafter set forth, each
of which your informant avers and verily believes to
be true, are made certain and supported by a special
affidavit, made under oath and that this information
is based upon said affidavit, which said affidavit is
hereto attached and made a part hereof.

vs. The United States of America. 9

day of July, 1920, at 1549 Stockton Street in the city
and county of San Francisco, in the Southern Divi-
sion of the Northern District of California, then and
there being, after the date upon which the 18th
Amendment to the Constitution of the United States
went into effect, did then and there unlawfully, wil-
fully and knowingly in violation of Section 3, Title
II of the Act of October 28, 1919, known as the
National Prohibition Act, sell certain intoxicating
liquor, to wit, claret wine, containing one-half of one
per cent or more of alcohol by volume and then and
there fit for use for beverage purposes. That the
sale of the said intoxicating liquor by the said de-
fendants at the time and place aforesaid was then
and there prohibited and unlawful and in violation
of Section 3 of Title II of the Act of Congress of
October 28, 1919, to wit, the " National Prohibition
Act."

AGAINST the peace and dignity of the United
States of America and contrary to the form of the
statute of the said United States of America in such
case made and provided. [7]

SEVENTH COUNT.

And affiant further gives the Court to understand
and be informed as follows, to wit :

That the allegations hereinafter set forth, each of
which your informant avers and verily believes to
be true, are made certain and supported by a special
affidavit, made under oath, and that this information
is based upon said affidavit, which said affidavit is
hereto attached and made a part hereof,

10 Louis Cahiale and Andrew Donizello

NOW THEREFORE, your informant presents;
Louis Cabiale, Andrew Donizello, Pietro Gabalo, G.
Bertollotti, Peter Zurich, Attilio Parcellini, Frank
Colai and Dante Forasiepi, hereinafter called the de-
fendants, to wit, on the 23d day of July, 1920, at 1549
Stockton Street in the city and county of San Fran-
cisco, in the Southern Division of the Northern Dis-
trict of California, then and there being, after the
date upon which the 18th Amendment to the Consti-
tution of the United States went into effect, did then
and there unlawfully, wilfully and knowingly
maintain a common nuisance in that the said de-
fendants did then and there at the said 1549 Stock-
ton Street on the premises known as the Gianjuja
Hotel, Restaurant, Cafe and Bar keep certain in-
toxicating liquor, to wit, claret wine, jackass brandy,
vermouth and mareschini, containing one-half of one
per cent or more of alcohol by volume and then and
there fit for use for beverage purposes.

That the keeping of the said intoxicating liquor
at the time and place aforesaid by the said defend-
ants was then and there prohibited, unlawful and in
violation of Section 21 of Title II of the Act of Con-
gress of October 28, 1919, to wit, the "National Pro-
hibition Act."

AGAINST the peace and dignity of the United
States of America and contrary to the form of the
statute of the said United States of America in such
case made and provided. [8]

EIGHTH COUNT.

And affiant further gives the Court to understand
and be informed as follows, to wit:

vs. The United States of America. 11

That the allegations hereinafter set forth, each of
which your informant avers and verily believes to
be true, are made certain and supported by a special
affidavit, made under oath and that this information
is based upon said affidavit, which said affidavit is
hereto attached and made a part hereof.

NOW THEREFOBE, your informant presents:
THAT Louis Cabiale, Andrew Donnizzello, Pietro
Gabalo, G. Bertollotti, Peter Zurich, Attilio Parcel-
ling Frank Colai and Dante Forasiepi, hereinafter
called the defendants, to wit, on the 23d day of July,
1920, at 1549 Stockton Street in the city and county
of San Francisco, in the Southern Division of the
Northern District of California, then and there
being, after the date upon which the 18th Amend-
ment to the Constitution of the United States went
into effect, did then and there unlawfully, wilfully
and knowingly have in their possession certain in-
toxicating liquor, to wit, claret wine, jackass brandy,
vermouth and mareschino containing one half of
one per cent or more of alcohol by volume and then
and there fit for use for beverage purposes.

That the possession of the said intoxicating liquor
by the said defendants at the time and in the place
aforesaid wTas then and there prohibited, unlawful
and in violation of Section 3 of Title II of the Act of
Congress of October 28, 1919, to wit, the National
Prohibition Act.

AGAINST the peace and dignity of the United
States of America and contrary to the form of the
statute of the said United States of America in such
case made and provided. [9]

12 Louis Cabiale and Andrew Donizello

NINTH COUNT.

And affiant further gives the Court to understand
and be informed as follows, to wit:

That the allegations hereinafter set forth, each of
which your informant avers and verily believes to
be true, are made certain and supported by a special
affidavit, made under oath and that this information
is based upon said affidavit, which said affidavit is
hereto attached and made a part hereof.

NOW, THEREFORE, your informant presents
THAT Louis Cabiale, Andrew Donnizello, Pietro
Gabalo, G. Bertollotti, Peter Zurich, Attilio Par-
cellini, Frank Colai and Dante Forasiepi, herein-
after called the defendants, to wit, on the 23d day
of July, 1920, at 1549 Stockton Street in the city
and county of San Francisco, in the Southern Divi-
sion of the Northern District of California, then
and there being, after the date upon which the 18th
Amendment to the Constitution of the United States
went into effect, did then and there unlawfully, wil-
fully and knowingly furnish to George Poultney
and C. W. Herbert certain intoxicating liquor, to
wit, claret wine, containing one-half of one per cent
or more of alcohol by volume and then and there fit
for use for beverage purposes.

That the furnishing of the said intoxicating liquor
by the said defendants at the time and in the place
aforesaid was then and there prohibited, unlawful
and in violation of Section 3 of Title II of the Act
of Congress of October 28, 1919, to wit, the National
Prohibition Act.

VS. The United States of America. 13

AGAINST the peace and dignity of the United
States of America and contrary to the form of the
statute of the said United States of America in such
case made and provided. [10]

TENTH COUNT.

And affiant further gives the Court to understand
and be informed as follows, to wit :

That the allegations hereinafter set forth, each of
which your informant avers and verily believes to
be true, are made certain and supported by a special
affidavit, made under oath and that this information
is based upon said affidavit, which said affidavit is
hereto attached and made a part hereof.

NOW, THEREFORE, your informant presents
THAT Louis Cabiale, Andrew Donnizello, Pietro
Gabalo, G. Bertollotti, Peter Zurich, Attilio Parcel-
ling Prank Colai and Dante Forasiepi, hereinafter
called the defendants, to wit, on the 23d day of July,
1920, at 1549 Stockton Street in the city and county
of San Francisco, in the Southern Division of the
Northern District of California, then and there being,
after the date upon which the 18th Amendment to
the Constitution of the United States went into
effect, did then and there unlawfully, wilfully and
knowingly furnish to George Poultney and C. W.
Herbert certain intoxicating liquor, to wit, cocktails
containing one half of one per cent or more of alco-
hol by volume and then and there fit for use for
beverage purposes.

That the furnishing of the said intoxicating liquor
by the said defendants at the time and in the place
aforesaid was then and there prohibited, unlawful

14 Louis Cabiale and Andrew Donizello

and in violation of Section 3 of Title II of the Act
of Congress of October 28, 1919, to wit, the National
Prohibition Act.

AGAINST the peace and dignity of the United
States of America and contrary to the form of the
statute of the said United States of America in such
case made and provided. [11]

ELEVENTH COUNT.

And affiant further gives the Court to understand
and be informed as follows, to wit:

That the allegations hereinafter set forth, each
of which your informant avers and verily believes
to be true, are made certain and supported by a
special affidavit, made under oath and that this in-
formation is based upon said affidavit, which said
affidavit is hereto attached and made a part hereof.

NOW, THEREFORE, your informant presents
THAT Louis Cabiale, Andrew Donnizello, Pietro
Gabalo, G. Bertollotti, Peter Zurich, Attilio Parcel-
lini, Frank Colai and Dante Forasiepi, hereinafter
called the defendants, to wit, on the 23d day of
July, 1920, at 1549 Stockton Street in the city and
county of San Francisco, in the Southern Division
of the Northern District of California, then and
there being, after the date upon which the 18th
Amendment to the Constitution of the United States
went into effect, did then and there unlawfully, wil-
fully and knowingly sell certain intoxicating liquor,
to wit, whiskey, containing one-half of one per cent
or more of alcohol by volume and then and there
fit for use for beverage purposes.

That the sale of the said intoxicating liquor by

vs. The United States of America. 15

the said defendants at the time and in the place
aforesaid was then and there prohibited, unlawful
and in violation of Section 3 of Title II of the Act
of Congress of October 28, 1919, to wit, the National
Prohibition Act.

AGAINST the peace and dignity of the United
States of America and contrary to the form of the
statute of the said United States of America in such
case made and provided.

FRANK M. SILVA,
United States Attorney,
ALBERT M. HARDIE,
Assistant United States Attorney,
Attorneys for Plaintiff. [12]

United States of America,

Northern District of California,

City and County of San Francisco, — ss.

George Poultney, being duly sworn, deposes and
says: THAT Louis Cabiale, Andrew Donizello,
Pietro Gabalio, G. Bertolotti, Peter Zurich, Attilio
Parcellini, Frank Colai, Dante Forasiepi, on the
22d day of July, 1920, at San Francisco, in the
county of San Francisco, in the Southern Division
of the Northern District of California, and within
the jurisdiction of this Court, did then and there
possess certain intoxicating liquor, to wit, wine, con-
taining one-half of one per cent or more of alcohol
by volume, which said liquor was then and there
fit for use for beverage purposes.

That the possession of the said intoxicating liquor
by the said defendants was then and there prohib-
ited, unlawful, and in violation of Section 3, Title

16 Louis Cabialc and Andre ic Donizello

II, of the Act of Congress of October 28, 1919, to
wit, the National Prohibition Act.

And affiant aforesaid on his oath aforesaid, doth
further depose and says: That Louis Cabiale, An-
drew Donizello, Pietro Gabalio, G. Bertolatti, Peter
Zurich, Attilio Parcellini, Frank Colai, Dante Fora-
siepi, on July 22, 1920, at San Francisco, in the
Southern Division of the Northern District of Cali-
fornia, and within the jurisdiction of this Court,
did then and there maintain a common nuisance in
that the said defendants did keep on the premises
at 1549 Stockton Street, known as Gianduja Cafe
and Eestaurant, intoxicating liquor, to wit, wine,
containing one-half of one per cent or more of alco-
hol in volume, which was then and there fit for use
for beverage purposes.

That the keeping of the said intoxicating liquor
by the said defendants was then and there prohib-
ited, unlawful, and in violation of Section 21, of
Title II, of the Act of October 28, 1919, to wit, the
National Prohibition Act. [13]

And affiant aforesaid on his oath aforesaid, doth
further depose and say : That Louis Cabiale, Andrew
Donizello, Pietro Gabalio, G. Bertolatti, Peter Zu-
rich, Attilio Parcellini, Frank Colai, Dante Fora-
siepi, on July 2, 1920, at San Francisco, California,
and within the jurisdiction of this Court, did then
and there sell on the premises at 1549 Stockton St.,
known as the Gianduja Cafe and Restaurant, in-
toxicating liquor, to wit, claret wine, containing one-
half of one per cent or more of alcohol by volume,

vs. The United States of America. 17

which said liquor was then and there fit for use for
beverage purposes.

That the selling of the said intoxicating liquor by
the said defendants was then and there prohibited,
unlawful and in violation of Section 3, Title II, of
the Act of October 28, 1919, to wit, the National
Prohibition Act.

And affiant aforesaid on his oath aforesaid, doth
further depose and say: That, Louis Cabiale, An-
drew Donizello, Pietro Gabalo, G. Bertolotti, Peter
Zurich, Attilio Parcellini, Frank Colai, Dante Fora-
siepi, on July 22, 1920, at San Francisco, California,
and within the jurisdiction of this Court, did then
and there sell on the premises at 1549 Stockton St.,
known as Gianduja Cafe and Restaurant, intoxicat-
ing liquor, to wit, claret wine, containing one-half
of one per cent or more of alcohol by volume which
was then and there fit for use for beverage pur-
poses.

And affiant aforesaid on his oath aforesaid, doth
further depose and say: That Louis Cabiale, An-
drew Donizello, Pietro Gabalio, G. Bertolotti, Peter
Zurich, Attilio Parcellini, Frank Colai, Dante Fora-
siepi, on July 22, 1920, at San Francisco, California,
and within the jurisdiction of this Court, did then
and there sell on the premises at 1549 Stockton
Street, known as Gianduja Cafe and Restaurant,
intoxicating liquor, to wit, claret wine, containing
one-half of one per cent or more of alcohol by vol-
ume, which was [14] then and there fit for use
for beverage purposes.

That the sales of the said intoxicating liquor by

18 Louis Cabiale and Andrew Donizello

the said defendants was then and there prohibited,
unlawful and in violation of Section 3 of Title IIy
of the Act of October 28, 1919, to wit, the National
Prohibition Act.

And affiant aforesaid on his oath aforesaid, doth
further depose and say: That Louis Cabiale, An-
drew Donizello, Pietro Gabalio, G. Bertolotti, Peter
Zurich, Attilfo Parcellini, Prank Colai, Dante Fora-
siepi, on July 22, 1920, at San Francisco, California,
and within the jurisdiction of this Court, did then
and there sell on the premises at 1549 Stockton
Street, known as the Gianduja Cafe and Restaurant,
intoxicating liquor, to wit, claret wine, containing
one-half of one per cent or more of alcohol by vol-
ume which was then and there fit for use for bever-
age purposes.

And affiant aforesaid on his oath aforesaid, doth
further depose and say: That Louis Cabiale, An-
drew Donizello, Pietro Gabalio, G. Bertolotti, Peter
Zurich, Attilio Parcellini, Frank Colai, and Dante
Forasiepi, on July 2, 1920, at San Francisco, Cali-
fornia, and within the jurisdiction of this Court,
did then and there sell on the premises at 1549
Stockton Street, known as Gianduja Cafe and Res-
taurant, intoxicating liquor, to wit, claret wine, con-
taining one-half of one per cent or more of alcohol
by volume which was then and there fit for use for
beverage purposes.

That the sale of the said intoxicating liquor by
the said defendants was then and there prohibited,
unlawful and in violation of Section 3 of Title II

vs. The United States of America. 11)

of the Act of October 28, 1919, to wit, the National
Prohibition Act. [15]

And affiant aforesaid on his oath aforesaid, doth
further depose and say: That Louis Cabiale, An-
drew Donizello, Pietro Gabalio, G. Bertolotti, Peter
Zurich, Attilio Parcellini, Frank Colai and Dante
Forasiepi, on July 23, 1920, at San Francisco, Cali-
fornia, and within the jurisdiction of this Court, did
then and there maintain a common nuisance in that
the said defendants did keep on the premises at 1549
Stockton Street, known as the Gianduja Cafe and
Restaurant, intoxicating liquor, to wTit, claret wine,
vermouth and mareschini containing one-half of one
per cent or more of alcohol by volume which wras
then and there fit for use for beverage purposes.

That the keeping of the said intoxicating liquor
by the said defendants was then and there prohib-
ited, unlawful and in violation of Section 21 of Title
II, of the Act of October 28, 1919, to wit, the Na-
tional Prohibition Act.

And affiant aforesaid on his oath aforesaid, doth
further depose and say: That Louis Cabiale, An-
drew Donizello, Pietro Gabalio, G. Bertolotti, Peter
Zurich, Attilio Parcellini, Frank Colai and Dante
Forasiepi, on July 23, 1920, at San Francisco, Cali-
fornia, and within the jurisdiction of this Court, did
then and there possess intoxicating liquor, to wit,
red wine, jackass brandy, vermouth and mareschino
wine, containing one-half of one per cent or more of
alcohol by volume which was then and there fit for
use for beverage purposes.

20 Louis Cabiale and Andrew Donizello

That the possession of the said intoxicating liquor
by the said defendants was then and there prohib-
ited, unlawful and in violation of Section 3 of Title
II of the Act of October 28, 1919, to wit, the Na-
tional Prohibition Act. [16]

And affiant aforesaid doth further depose and say :
That Louis Cabiale, Andrew Donizello, Pietro Ga-
balio, G. Bertolotti, Peter Zurich, Attilio Parcelling
Frank Colai and Dante Forasiepi, on July 23, 1920,
at San Francisco, aforesaid did then and there fur-
nish to the said affiant and C. W. Herbert certain
intoxicating liquor, to wit, wine, containing one-half
of one per cent or more of alcohol by volume which,
was then and there fit for use for beverage purposes.

And affiant aforesaid on his oath aforesaid, doth
further depose and say: Louis Cabiale, Andrew
Donizello, Pietro Gabalio, G. Bertolotti, Peter Zu-
rich, Attilio Parcellini, Frank Colai and Dante
Forasiepi, on July 23, 1920, at San Francisco, did
then and there sell on the premises at 1549 Stockton
Street, intoxicating liquor, to wit, whiskey, contain-
ing one-half of one per cent or more of alcohol by
volume, wrhich was then and there fit for use for
beverage purposes.

vs. The United States of America. 21

cocktails, containing one-half of one per cent or
more of alcoh'ol by volume, which said liquor was
then and there fit for use for beverage purposes.

That the furnishing and selling of the said intoxi-
cating liquor by the said defendants was then and
there prohibited, unlawful and in violation of Sec-
tion 3 of Title II of the Act of [17] October 28,
1919, to wit, the National Prohibition Act.

GEORGE POULTNEY.

Subscribed and sworn to before me this 28th day
of July, 1920.

[Seal] FRANCIS KRULL,

United States Commissioner Northern Dist. of Cali-
fornia.

[Endorsed] : Piled July 29th, 1920. W. B. Mal-
ing, Clerk. By Lyle S. Morris, Deputy. [18]

At a stated term of the District Court of the United
States of America for the Northern District of
California, First Division, held at the court-
room thereof, in the city and county of San
Francisco, on Saturday, the 31st day of July, in
the year of our Lord one thousand nine hun-
dred and twTenty. Present: The Honorable
WILLIAM H. SAWTELLE, Judge.

22 Louis Cabiale and Andrew Donizello

No. 8602.

UNITED STATES OF AMERICA

vs.

LOUIS CABIALE, ANDREW DONIZELLO,
PIETRO GAVELLO, G. BERTOLOTTI,
PETER ZURICH, ATTILIO PARCEL-
LING FRANK COPPOLO and DANTE
FORASIEPI

Minutes of Court— July 31, 1920— Pleas.

In this case the defendants were present with at-
torney, C. F. Tramutolo, Esq., and A. M. Hardie,
Esq., Asst. U. S. Atty., was present on behalf of the
United States. After hearing the respective attor-
neys, arraignment was waived, and pleas of "Not
Guilty " as to each defendant was entered herein,
and this case ordered continued to September 17,
1920, for trial, and that each of said defendants have
until August 3, 1920, within which to give bonds for
appearance herein. [19]

At a stated term of the District Court of the United
States of America for the Northern District of
California, First Division, held at the court-
room thereof, in the City and County of San
Francisco, on Tuesday, the 21st day of Septem-
ber in the year of our Lord one thousand nine
hundred and twenty. Present: The Honorable
MAURICE T. DOOLING, Judge.

vs. The United States of America. 23

No. 8602.

UNITED STATES OF AMERICA

vs.

LOUIS CABIALE et al.

Minutes of Court— September 21, 1920— Trial.

This case came on regularly this day for the trial
of defendants herein, who were present with attor-
ney, C. F. Tramutolo, Esq., B. F. Geis, Esq., and A.
M. Hardie, Esq., Asst. U. S. Attys., were present on
behalf of the United States. Upon the calling of
the case all parties answering ready for such trial
the Court ordered that the same do proceed and
that the jury-box be filled from the regular panel
of trial jurors of this Court. Accordingly the here-
inafter named persons were duly drawn by lot,
sworn and examined, etc., as follows: William R.
Pentz, Alexander S. Ireland, Andrew Armstrong,
E. H. Jones, Winthrop P. Austin, E. R. Brady, and
John C. Bateman, accepted; J. M. Dupas, good
cause appearing therefor, the Court ordered that
said juror be excused; Warren Spieker, good cause
appearing therefor, the Court ordered that said
juror be excused; C. H. Adams, accepted; M. H.
Falkenstein and Benj. E. Laskey, good cause ap-
pearing therefor, the Court ordered that said jurors
be excused; Edwin R. Jackson, accepted; F. A.
Smith, challenged for cause by the United States,
allowed, and juror excused; F. W. Gerlash and
Louis B. Gorgers, accepted; E. H. O'Brien, peremp-
torily challenged by the United States and excused;

24 Louis Cabidle and Andrew Donizello

and A. W. Hollard, accepted. Thereupon twelve
(12) persons having been accepted as jurors to try
the defendants herein were accordingly sworn, to
Wit : [20]

William R. Pentz, John C. Bateman,

Alexander S. Ireland, C. H. Adams,

Andrew Armstrong, Edwin R. Jackson,

E. H. Jones, F. W. Gerlash,

Winthrop P. Austin, Louis B. Gorgers,

E. R. Brady, A. W. Hollard.

Mr. Hardie made statement to the Court and jury
of the nature of the case, and Mr. Geis called George
W. Poultney, A. R. Shurtleff, H. M. Kupser, W. D.
Smith, Sam Shaen, William J. Jordan, Harry C.
Drew, W. L. Estelle, A. M. Hardie and R. F. Love,
each of whom was duly sworn and examined on
behalf of the United States, and introduced in evi-
dence certain exhibits which were filed and marked
United States Exhibits Nos. 3 (checks), 1 and 2
(same as 1 and 2 for identification), 6, 7, 8 and 9
(bottles and contents), and presented and filed for
identification certain exhibits which were marked
United States Exhibits 1, 2, 4 and 5 (for identifica-
tion) (bottles and contents), and thereupon rested
case on behalf of the United States.

Mr. Tramutolo thereupon moved the Court for
an order to instruct the jury herein to return a
verdict of not guilty as to defendant, Pietro Gavello
and certain other defendants, which motion, after
hearing Mr. Tramutolo, the Court ordered denied.

The hour of adjournment having arrived, tFe
Court further ordered that the trial of this case be

vs. The United States of America. 25

continued to September 22, 1920, and that all par-
ties be and appear accordingly. [21]

At a stated term of the District Court of the United
States of America for the Northern District of
California, First Division, held at the court-
room thereof, in the city and county of San
Francisco, on Wednesday, the 22d day of Sep-
tember in the year of our Lord, one thousand
nine hundred and twenty. Present: the Hon-
orable MAURICE T. DOOLING, Judge.

No. 8602.

UNITED STATES OF AMERICA

vs.

LOUIS GABIALE, FRANK COPPOLA, PETER
ZURICH, DANTE FORASIEPI, P. GAV-
ELLO, ANDREW DONIZELLO, G. BER-
TOLOTTI, and ATTILIO PARCELLINL

Minutes of Court— September 22, 1920— Trial
(Continued).

This case came on regularly this day for further
trial of said defendants, who were present with at-
torney S. F. Tramutolo, Esq., B. F. Geis, Esq., and
A. M. Hardie, Esq., Asst. U. S. Attys., were present
on behalf of the United States. The Jury heretofore
impaneled and sworn to try said defendants was
present and complete. Mr. Tramutolo moved the
Court for an order instructing the jury herein to
return a verdict of not guilty as to defendants,

26 Louis Cabiale <ind Andrew Bonizello

Dante Forasiepi, Frank Coppola and Peter Zurich,
and after hearing Mr. Tramutolo, the Court ordered
that said motion be denied. Mr. Tramutolo, re-
called W. D. Smith, who was further cross ex-
amined on behalf of defendants. Mr. Tramutolo
then called Louis Cabiale, Frank Coppola, Peter
Zurich (defendant), each of whom was duly sworn
and examined on behalf of defendants. E. M.
Ratto was duly sworn as interpreter herein. Mr.
Tramutolo then called Dante Forasiepi (defendant)
who was duly sworn and examined on behalf of
defendants through interpreter. P. Gavello, An-
drew Donizello, G. Battaglia, A. Cesena and E. M.
Eatto were each duly sworn and examined on be-
half of defendants. Mr. Tramutolo introduced in
evidence a certain book wrhich was filed and marked
Defendant's [22] Exhibit No. 1, and thereupon
rested case of defendants. Mr. Geis then recalled
in rebuttal George W. Poultney, W. D. Smith, H.
C. Drew and W. J. Jordan, each of whom was fur-
ther examined on behalf of the United States, and
thereupon rested case on behalf of the United
States. The Court ordered that United States Ex-
hibits 4 and 5 for Identification be introduced in
evidence and the same were marked United States
Exhibits Nos. 4 and 5 (bottles and contents).

The case was then argued by Mr. Hardie, Mr.
Tramutolo, and Mr. Geis and submitted; where-
upon the Court proceeded to instruct the jury
herein, and as a part thereof withdraw the 11th
Count of the Information filed herein from the con-
sideration of the jury, and after being so instructed

vs. The United States of America. 27

the jury herein retired at 4:05 o'clock P. M., to
deliberate upon a verdict and subsequently returned
into Court at 6:20 o'clock P. M., and upon being
called all twelve (12) jurors answered to their
names, and in answer to question of Court stated
that they had agreed upon a verdict and presented
a written verdict, which the Court ordered filed
and recorded, viz:

"We, the Jury, find as to the defendants at the
bar, as follows, Louis Cabiale, Guilty on Counts
2, 3, 8, Not Guilty on Counts 1, 4, 5, 6 and 7;
Andrew Donizello, Guilty on Counts 2, 3 8, 9, 10,
Not Guilty on Counts 1, 4, 5, 6 and 7; P. Gavello,
Head Waiter, Not Guilty on all Counts; G. Bar-
tolotti, Bar Tender, Not Guilty on all Counts;
Peter Zurich, Not Guilty on all Counts; Attillio
Parcellini, Not Guilty on all counts; Dante Far-
asiepi, Not Guilty on all Counts; Frank Coppola
Not Guilty on all Counts.

WM. R. PENTZ,

Foreman. ' '

After hearing the respective attorneys, the Court
ordered that matter of judgments as to defendants,
Louis Cabiale and Andrew Donizello be continued
to September 25, 1920, and in the meantime said
defendants go at large upon the bonds heretofore
given for appearance herein, and that the other de-
fendants found not guilty be forthwith discharged,
that they go hence without day and that their [23]
bonds heretofore given for their appearance herein
be exonerated. Further ordered that Defendants'
Exhibit No. 1 be returned to the defendants, and

28 Louis Cabiale and Andrew Donizello

accordingly said exhibit was returned to defend-
ant Louis Cabiale in open court. [24]

In the Southern Division of the United States Dis-
trict Court for the Northern District of Cali-
fornia, First Division.

No. 8602.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

LOUIS CABIALE et al.,

Defendants.

Bill of Exceptions.

BE IT REMEMBERED : That on the twentieth
day of September 1920, the cause of United States
of America, vs. Louis Cabiale, Andrew Donizello,
Pietro Gabalio, G. Bertolotti, Peter Zurich, Attilio
Porcellini, Frank Colai, Dante Forasiepi, came on
regularly to trial before the Honorable Maurice T.
Dooling, Judge of the above-entitled court, Ben
F. G-eis, Assistant United States Attorney and
Albert M. Hardie, Assistant United States Attorney
appearing on behalf of the United States, and
Chauncey F. Tramutolo, Esq., appearing on behalf
of the said defendants.

Thereupon a jury was duly empaneled and sworn,
and the following proceedings were had and taken.

vs.

The United States of America. 21)

Testimony of George Poultney, for the Government.

GEORGE POULTNEY, called as a witness for
the United States, and being first duly sworn, testi-
fied as follows :

I am a Federal prohibition agent and have been
such since the time prohibition took effect, some-
time in January 1920. I have seen all of these de-
fendants at different times, some of them at the
place of business and some at the Commissioner's
office. I recall seeing them on the evening of the
raid of what is called the Gianduja place. On
the night the place was raided, I went there about
a quarter past or half past nine at night. I ob-
served the first gentleman with the mustache, the
defendant Cabiale; the next gentleman he was at
the cash register, and the third gentleman I ob-
served going back and [25] forth in the restaur-
ant. I don't think he was a waiter. That night
I went to the restaurant, and I ordered dinner, and
ordered four glasses of claret, which were served
me, then, later on during the evening, I ordered
four cocktails, which were served; two of the
glasses of claret were drunk and two of the cock-
tails were drunk, and the place was raided, and
some of the officers took the wTine and cocktails that
were remaining from the table at which I was
sitting. There were four people with me that eve-
ning, Mr. Herbert who is now in Honolulu and
two ladies. I don't know7 where the ladies are
now. I did the ordering for myself and the other
three, I ordered the meal and the liquor, I drank

30 Louis Cabiale and Andrew Donizello

(Testimony of George Poultney.)
part of it. I know it was claret. The place is
located at 1549 Stockton Street in this city and
county. After we drank the claret we ordered the
cocktails, they consisted of some sort of an alco-
holic concoction ; off hand, I would say it was jack-
ass brandy and vermouth. Four of these were
ordered. I did not order any further drinks that
evening, we did not have a chance to order any
further drinks. I was in the place of Mr. Cabiale
and these gentlemen on July 22, the evening before.
I saw Mr. Cabiale there, I believe, on that evening,
and I observed, as I was leaving, the gentleman
with the bald head, next to Mr. Cabiale on that
evening we bought four glasses of claret. On the
first night, the first time we went there they
charged 25 cents a drink for the claret; the next
night for some reason, we did not pay anything at
all. The reason was everybody said the place was
raided, and we had better get out of there, so If
with my party, we got out, with the rest of the
patrons of the place. On the evening of the 22d
we paid for the claret, 25 cents a drink. On the
22d we had two rounds, we drank the claret; one
of the glasses we poured into a bottle — one of the
glasses of claret. The first night I had spoken to
Mr. Cabiale and told him that I had come down
for a little something to eat, and I wanted to get
something to drink, and he said that was all right,
I could have what I wanted. I do not see anybody
here of these defendants that served the liquor on
that night. (To Mr. Tramutolo.) I do not observe

vs. The United States of America. 31

(Testimony of George Poultney.)
anybody here who served me liquor on that partic-
ular night. (To Mr. Geis.) Well, Mr. Cabiale ush-
ered me to a seat and [26] took my order, and
subsequently I was served by a waiter. I gave my
order for eats and drinks to Mr. Cabiale. (To
Mr. Geis.) Yes, that is that bottle that I took with
me to the Gianduja restaurant, w7ith my label on it.
This is the liquor that was served to me under
my order, for which I paid and which I finally
placed in this bottle.

On cross-examination the witness testified:
Prior to working as a prohibition enforcement
officer I was in the army. I am not able to dis-
tinguish claret from grape juice by sight. I would
have to taste it. I do not think I could judge as
to the quantity of alcohol it contains except on
a very strong drink. I would not have to rely as
to the alcholic content of any liquor solely upon
an analysis in all liquors. I would say in claret
I would hesitate to state that it contained a great
amount of alcohol, but in other liquors I do not
think that I would hesitate to say. I came to the
conclusion that it contained more than one-half of
one per cent, by the taste of alcohol and the smell.
On a good many things I think I could tell by the
smell as to its alcoholic content, as to whether it
contains more than one half of one per cent. I
was there on the night of the 23d, the night of the
raid. I procured a search warrant for the purpose
of searching that place. I did not execute the
search warrant personally, I procured it personally,

32 Louis Cabiale and Andrew Donizello

(Testimony of George Poultney.)
I rather think I delivered it to Mr. Wolff. I don't
know what Mr. Wolff did before going to the place.
Mr. Wolff was not with me. I am now speaking
of Friday the 23d. The raid was conducted some-
where around 10:30, I should imagine. I went
with Mr. Herbert and two ladies. I was not per-
sonally in possession of that search-warrant, I
secured it from Judge Sawtelle. I think I gave
it to Mr. Wolff. I made out this tag, that is my
handwriting, I made it out that same evening. The
waiter that served me with the claret, I do not see
here. I say that Mr. Cabiale one of these defend-
ants took my order, I am positive that I asked him
for claret. I did not procure any liquor on the
evening of the 22d other than those four glasses of
claret. On the 22d I went there with another per-
son and on the 23th I went there with three other
persons. On the 22d I went there with a lady in
no way at all connected with the enforcement office.
The bottle that [27] I took away from the Gian-
duja Restaurant containing the drink that I pro-
cured there, I brought the next day personally to Mr.
Love the Government chemist. Mr. Love did not
return it; he returns us a written analysis of all
liquor that he analyzes, and puts it in a pigeon-
hole and afterwards we get it when we need it.
If I am not mistaken, I will say Mr. Love has
initialed that label. I suppose he has some particu-
lar mark upon there that he could identify it with.
On Thursday, at the time I accompanied this
woman, I paid 25 cents a glass for the claret that

vs. The United States of American 33

(Testimony of George Poultney.)
was bought. I tasted my own glass. On Friday
evening, which was the following, I was accom-
panied by Mr. Herbert and two ladies. We pro-
cured four glasses of claret that evening. Nobody
paid for that round of drinks. Someone said the
place was raided and wTe had better get out, so the
ladies that I was with seemed quite excited, they
wanted to get out of the place, so we got out; they
did not know that there was to be a raid on Gian-
duja's restaurant that night; they had no idea that
anything wras going to happen, they w7ere not con-
nected with the department in any way, manner,
shape or form. They were just people we had
picked up voluntarily, Mr. Herbert and myself.
Some officers came along and they began to pick up
glasses on different tables, and the waiters were
running through the place saying, "Throw your
wine away, the place is being raided, drink up your
wine quick." So there was quite a bit of confusion,
a good many people got up to leave, and with the
crowd leaving I left also. That is the reason that
I did not pay for the meal that I obtained and
what I drank that night. Both food and drinks,
probably, wTould run about $8 or $10. I had some
cocktails also that night, I don't know what kind.
I did not preserve them; the cocktails were taken
off my table by one of the officers; I think it was
Mr. Shurtleff, who seemed to come along there,
and also Mr. Shaen, if I am not mistaken, took
some from my table. Part was still in the glass.
I was seated in the place quite a while before they

34 Louis Cabiale and Andrew Donizello

(Testimony of George Poultney.)
came in. They came to other tables before they
came to mine as I was seated quite a ways from
the door. Part of my wine might have been drunk ;
I drank part of the cocktail and part of the claret.
With reference to the cocktails that I procured
there I would say that it contained an alcoholic con-
coction of some kind. [28] I would say offhand
that if contained vermouth. I have an idea what
vermouth tastes like. I think it also contained
jackass brandy. Jackasss brandy is an illicit dis-
tilled liquor, the tax on which has not been paid.
Some refer to it as moonshine, I think jackass
in the popular name for it. I have seen stills in
operation in which the jackass brandy was being
made. When I was served on Thursday night I
said that I did not see any defendant here that
served me. On Friday night that gentleman sit-
ting away in the back there, the heavy set man,
next to the man with the mustache served me.
(Here the witness identified the man referred to
as Mr. Frank Coppola.) Aside from Coppola, Cabi-
ale and Donizello I do not recognize any of the
other five defendants. On Thursday night I saw
Mr. Cabiale and the gentleman behind him; on
Friday night I saw Mr. Cabiale and the gentle-
man behind him and the other gentleman, Mr. Cop-
pola.

On redirect examination the said witness testified ;

The place is a good sized restaurant ; I would not
be able to give you the measurments; a good-sized
dance hall there. I should say it is a larger room

vs. The United States of America. 35

(Testimony of George Poultnoy.)
tha£ this. There is a dancing place there and
music and singing. You might refer to it as a
cabaret. I would say there are eight or nine
waiters. The place seemed to be quite full of
patrons — filled to its capacity, I think. I would
say probably 150 people, in that neighborhood. I
have not the least idea how late they keep open.
The claret I drank on Thursday night and on Fri-
day night seemed about the same.

Testimony of A. R. Shurtleff, for the Government.

A. R. SHURTLEFF, called for the United States
and being first duly sworn, testified as follows :

I am one of the Government prohibition agents
and was such in July of this year. I remember
the occasion of going to what is known as the
Gianduja place, that is where Mr. Cabiole carries
on his place of business. On that evening I had
occasion to take some liquor from that place. I
took it from the table of the witness George
Poultney. I took it down to a little counter where
they had the cash register, at the entrance to the
barroom, and gave it over to Mr. Kupser; I put it
in a little flask that I took there for [29] that
purpose. The flask I took out of our stock room
in the Appraiser's Building. The flask with the
tag on it is the flask and the liquor that I placed
in it. That is my tag, in my handwriting. That
was received by me on the evening of the raid,
which I understand was on the evening of the 23d
of July, Friday evening, in the place knowrn as the

36 Louis Cabiale and Andrew Donizello

(Testimony of A. R, iShurtleff.)

(Handuja place, conducted by these defendants, or

jsome of them.

Q. On that evening, Mr. Shurtleff, will you state
to the jury and Court whether or not you observed
liquor on the other tables, generally or promiscu-
ously, in that place?

To this question counsel for the defendants then
and there objected upon the ground that the same
was incompetent and irrelevent and not binding
upon the defendants. This objection was overruled
by the Court, to which ruling of the court counsel
for the defendants then and there duly excepted.

The WITNESS.— (Continuing.) As we entered
the place, I was surprised at the amount of colored
liquid or liquor that was on the different tables.
As I proceeded in, there were two couples sitting
at a table, two men and two women, and I told
them who I was, what my business was there, and
proceeded to take the wine off the table. I gathered
up all I could possibly carry from two tables at
a time, and took it back to the counter, where John
Kupser was sitting, and told him to take care of
it. After taking one back, I went right up to the
dining-room and went to the table where George
Poultney and party were sitting. The wine and the
cocktails which they had at this table they had re-
moved from the top of the table, and were hiding
it underneath. I told them who I was, and that I
wanted what they had in the glasses, and took the
cocktails and the claret away from them and took
it back to Mr. Kupser, and he put it in this flask.

vs. The United States of America. 37

(Testimony of A. R. ©hurtleff.)

(To the Court.) It was mixed, the cocktails and
wine were put into the flask. (To Mr. Tramutolo.)
All four into that one flask, from Mr. Poultney's

table. The other liquor that was taken from the
other tables was put in a bottle that I picked up
back of this counter and washed out, in that bottle
sitting there ; it was a black bottle. I would not say-
that I could identify that particular bottle, but I
was particular in labeling this one bottle from Mr.
Poultney's table. After the liquor [30] was
gathered from the tables, there was a good deal of
confusion, and the people were moving out and in,
and I stepped down toward a door that is about
in the center of the hall leading into the barroom,
and I noticed quite a bit of liquor in there that
the men in that particular part of the building
had gathered up. They had some in a pitcher,
and also had some in bottles.

Thereupon the said bottles were marked for iden-
tification, the large bottle as U. S. Exhibit 2 and
the small bottle Exhibit 1.

On Cross-examination, the said witness testified:
I was in the place on Friday July 23d, the night
of the raid. I got into the place thru the front
entrance. The place is at Stockton and Union, on
the corner, and there are several entrances. I went
in from the east side, on the Stockton street side.
John Kupser went in with me, I would not say that
we were the only two who entered that door. I
know John Kupser and I went in together. I
went up to the couples at one table, I observed

38 Louis Cabiale and Andrea' Donizello

(Testimony of A. R, i&hurtleff.)
liquor there. I should say it was wine, from the
color of it. I sampled it at the table, I should say
it was claret wine. I gathered that up, and the
next table to it, and took it back in glasses. That
was not poured into the bottle which has just now
been introduced, it was put into another bottle.
(To the Court.) This here came from the table of
Mr. Poultney and the parties sitting at the table.

That is my handwriting on the label which was
attached by me that night. It was taken to the
prohibition enforcement office and up to the chemist.
It w7as under my custody at all times. I was riding
right in the wagon with it all the time. The first
table I stopped at was this table wrhere these two
couples were. I went to the second table and
gathered up all I could possibly carry from the two
tables, and carried it back to the counter. That wras
put in a big bottle that I picked up from behind the
counter. That was taken along with me that same
night. After that I went to Mr. Poultney 's table
where Mr. Herbert and Mr. Poultney and two ladies
were sitting. It was to the rear, I should say just
about the end of the platform where you go down
into the dance hall. I imagine some of the liquor
had been spilled, because they were trying to hide the
cocktails and wine under the tablecloth. There
were perhaps fifty people [31] in the place, of
course, I did not get to see all of them, but they
were doing a good business that night. I did not
create considerable confusion w'hen I went in. I
spoke to several people, I told them who I was. I

vs. Tlie United Stales of America. oD

(Testimony of A. R. Shurtleff.)

told them to go ahead and finish their dinner. I
cannot say that I saw any particular waiter serving
liquor. I do not know whether any defendant
served that liquor on that particular occasion to
that party.

On redirect examination the witness testified:
On that night I saw the defendant Donizello and
the man next to him. I would not say that I saw
Mr. Cabiale. I was too busy to pay much attention
to all of these men, but I remember those two in
particular. Mr. Donizello is the man that walked
up to me at the time we entered the place. The
cocktails and the claret in the bottle that has been
introduced were taken up to the chemist the next
morning, if I remember correctly.

Testimony of H. M. Kupser, for the Government.

H. M. KUPSER, called as a witness for the
United States and having been first duly sworn, tes-
tified :

I am a prohibition agent and have been such dur-
ing all of this year. I was present on the evening
of the 23d of July of this year at the place known
as the Gianduja place, where the defendants, here,
conduct their business. During the raid that night
of the Gianduja cafe and restaurant, I was in-
structed to take a position near the cash register,
or where the checks were paid, and there I received
the liquors which were taken from the various
tables, and took charge of those. I will state in
particular that the various liquors that were

-10 Louis Cabiale and Andrew Donizello

(Testimony of H. M. Kupser.)

brought up, the liquors which were seized on the
table occupied by Mr. Poultney and his friends that
night, those liquors were brought to me by Agent
Shurtleff and Agent Shaen, and the liquors seized
from that particular table were put in a separate
bottle. This bottle nowT shown me is the bottle con-
taining the liquid that was taken from Agent Poult-
ney 's table. The other liquors, which were taken
from the other tables, were put in other bottles, but
the other liquors which were taken from the other
parts of the premises, such as the bar, I had noth-
ing to do wTith. I believe they were subsequently
taken to the Government [32] chemist. I recog-
nize the defendant Cabiale, sitting directly back
of Mr. Tramutolo, and I also recognize the large
gentleman with the mustache. I believe he was in
charge of the bar in the saloon premises. I noticed
as the various waiters would come up with their
tags, they would have some sort of a tag and would
produce it at the cashier's, where he registered it,
and the amount was rung up according to what ap-
peared on the tag. The tags were then put in the
cash register. I got some of those tags on that
evening. These are some of those tags which were
in the bundle in the cash register. I did not put
any marks on them, I put no identification marks
on them. I believe they were turned over to Mr.
Shaen; that is, after we arrived back at the Agent's
office they were put in his desk.

Thereupon the United States Attorney offered

vs. The United States of America. 41

the said tags in evidence; the two offered read as
follows :

"Gianduja Restaurant, Waiter No. 10, Check
No. 24. Number of persons. 2 Cafe Royal $1.
1 Whiskey, 74 cents. 2 wine, 50 cents, $2.25.
War ta*, 10 cents. $2.35.' '

" Gianduja Restaurant, Waiter No. 10, Check
No. 36. Short 25 cents. 2 Cafe Royal $1. 2
Whiskey $1,25. 1 wine 25. Total $2.50. "
To the introduction of this evidence counsel for
the defendant then and there objected upon the
grounds that there was no means of identifying the
said tags and that the same wTere not taken pur-
suant to a search-warrant.

The COURT. — You cannot raise that question
here in the middle of the trial. There is a time and
place to try that issue. You cannot try it here
now.

Mr. TRAMUTOLO.— Here is our situation—
The COURT.— (Interrupting.) I do not care to
Hear about it from you now. I am quite familiar
with the law, and have been quite lenient with de-
fendants in enforcing it.

Mr. TRAMUTOLO.— We are trying a collateral
matter here as to checks that were found there.

The COURT. — We are not trying any collateral
matter. These men are charged with the sale of
liquor. They say they did not sell the liquor there.
In their cash register is found a check which on its
face purports to be a check for [33] the sale
of whiskey and the sale of wine. The defendants

42 Louis Cabidle and Andrew Donizello

(Testimony of H. M. Kupser.)

can make such explanation about that as they desire

later on.

To this ruling of the Court counsel for the defend-
ants then and there duly excepted.

On cross-examination, the said witness testified:
The liquor that was procured from Mr. Poult-
ry's table was brought to me at the cash register.
I poured it into the bottle; that tag was placed
there by Mr. Shurtleif, in my presence. That was
at the time that the liquid was poured into the
bottle. The liquid was brought to me in glasses
and then poured into that bottle by me. Mr. Shurt-
leff brought part of it and Mr. Shaen part. There
were four glasses brought to me in all. The con-
tents of the four glasses brought to me by Mr.
Shurtleif and Mr. Shaen were poured into that
bottle. I identify Mr. Cabiale as being there that
Friday night. I believe that I recognize the little
fellow; I am not certain, but I particularly recog-
nize the gentleman with the mustache. As to the
other defendants, I am not certain as to their iden-
tity. I was stationed by the cash register in the
dining-room. The cash register is close to the door
on the east entrance of the restaurant. I believe
the gentleman sitting directly back of you was be-
hind the cash register taking in money w7hile I was
standing there. I was there during the entire in-
vestigation. I believe wre entered the place about
ten thirty P. M. We were probably in there an
hour or thereabouts. These checks which I have
identified were found in the cash register. I do not

vs. The United States of America. 43

(Testimony of H. M. Kupser.)

know, of my own knowledge, that Mr. Shaen and
Mr. Shurtleff brought liquor from Poultney's table.
They told me they did. I did not see them get it at
Poultney 's table.

Testimony of W. D. Smith, for the Government.

W. D. SMITH, called as a witness for the United
States and being first duly sworn, testified:

I am and was on July 23d last, a prohibition
agent. I wTas present at the time on the 23d of
July, when a raid was made on the Gianduja place.
I entered the barroom on the Union Street side,
followed by Thomas, Wolfe and Shaen. The bar-
tender wTas at the end of the bar, right as we went
in. That [34] gentleman in the middle there,
with the moustache, the big man, was the bar-
tender. I think he was standing there when I went
in; as we came in he started tow7ard the middle of
the bar, and not knowing what he might have been
going there to do, I thought he might try and dump
some stuff, I went over the bar and stopped him,
and on the drain board I picked up a pitcher, a
porcelain pitcher about half full of wine ; I handed
that pitcher to Mr. Thomas; he came behind the
bar, and I handed it to him. Just then one of the
waiters came running out from the restaurant
proper, and he had a glass in his hand, and seemed
very much excited, saying something about revenue
men raiding, something like that, so I went over
and took a glass away from him and turned that
over to Mr. Thomas; I believe that man was the

44 Louis Cabiale and Andrew Donizello

(Testimony of W. D. Smith.)

defendant Dante Forasiepi. Next I saw a man
running right thru the door — I saw a man run-
ning at a pretty good speed, I didn't know what he
was up to, so I left the other two men at the bar
and followed him, and I lost track of him in the
confusion; I did not know where he went to, so I
went back to the restaurant, and then I went down
in the basement and searched the basement and
found nothing there. I cannot identify the man
that ran, from any of these that are here. I saw
the figure of a man going by the door, and I ran out
to see who it was, but I did not see him. When I
came back from the basement I went to the restau-
rant and they were moving the liquor in the
restaurant up to the cash register. Kupser was
, there, I believe. I stayed there until they tele-
phoned for the patrol wagon; the patrol wagon
came, and, in the meantime, the men out in the bar
had taken the stuff, the bottles, I don't remember
how many, I think five or six bottles, and put it in
a box, and by that time the bartender wanted to go
upstairs and change his coat, so I went upstairs
with him, while he changed his coat, and then came
down and got into the wagon with the rest of them.

On cross-examination, the witness testified:
This was on Friday night, July 23d, around 10 :30
or 10:25. Enforcement officers Wolfe and Thomas
were with me. There are two doors to the bar-
room leading out to the sidewalk, one on the Union
Street and one on the Stockton Street side. Wolfe
stayed outside of the [35] bar and locked the

vs. The United States of America. 45

(Testimony of W. D. Smith.)

door. I jumped over the bar. Thomas did not
jump over. I am absolutely sure of that. I don't
know that anybody guarded the door on the corner
of Union and Stockton Streets. I know that Mr.
Wolfe locked the door. He locked both of them.
I did not make a search of the back bar, I jumped
over the bar and got this pitcher on the drainboard.
I found this wine at the end of the bar as you go
in from Union Street. I smelled what wras in the
pitcher. I did not taste it. I can tell wTine by
smell. I could tell you the difference between wine
and whiskey and a soft drink smell. Prior to
working as an enforcement officer I was in the
United States Army. I had had no experience
with tracing sales of liquor prior to joining the
army. I saw Mr. Poultney that night. He was
sitting at the rear end, pretty near the rear end, as
I remember.

Testimony of Samuel Shaen, for the Government.

SAMUEL SHAEN, called as a witness for the
United States and being first duly sworn, testified:

I am a prohibition and internal revenue officer
and was such on July 23d last. I was present at
the place known as Gianduja's place on Friday,
July 23d of this year, at the time this raid was
made. We entered the place, at least I entered the
place, with three others on Union Street, and as
we walked in we saw waiters with trays delivering
liquor to the different tables, and we started after
one of them, that is, Jordan and I, and when he

46 Louis Cabiale and Andrew Donizello

(Testimony of Samuel Shaen.)

found out that we were revenue officers he upset
the tray and spilled the contents, and then we
started in different directions. I went to a tabl&
that was occupied by two gentlemen and two ladies,
and I found that they were drinking claret, I sup-
pose it was — I know it was claret — and they were
hiding it under the table when we came in there,
and I took one glass awray from one of the men
sitting at the table, and took the glass of claret up
to the front of the restaurant and placed it on the
counter; a man named Kupser was in charge of
that part of it. Then I went into the barroom and
there were a couple of agents in there, and I went
behind the counter, and examined some of the lock-
ers with one of the agents, and took several bottles
from behind the counter, from these lockers. That
is one of the bottles that was taken out of the lock-
ers at that time. We put this on top of the coun-
ter. We took it down to the Appraisers' Building
[36] and put it into the room which we were occu-
pying at that time, and subsequently it went to the
chemist for analysis. We sealed these bottles up;
put sealing wax on every bottle that we took. This
bottle, vermouth, was one of the bottles we got from
the lockers. We took it away that night to the
Appraisers' Building and subsequently it was deliv-
ered to the Government chemist for analysis.

(Thereupon the bottles in question were marked
4 and 5 for identification.) Besides these two,
there were six bottles, I think, altogether, that we
took with us that night when we left. I recognize

vs. The United States of America. 17

(Testimony of Samuel Shaen.)

Donizello as having been there that night. He was
serving at one of the tables as a waiter ; and I took
him and placed him in charge of one of the men at
the outer door, that we had closed at that time. I
asked him to go out there because he was under
arrest. I saw him go to a table, I think, where
these four people were. The reason I can identify
him particularly is a little while after we got
through in the bar he asked me if he could not go
to some of the tables and collect some money from
people he had served, and I said all right, and I
watched him go to two different tables, and when
he got through with those tables, he came back
and said he would like to go down and change his
clothes, and I said all right, and I took him to the
head of the stairway leading into the basement,
where the lockers were, I presume, and Mr. Estelle
was down there with another man, and I waited a
little while and he did not come back, and I went
down and asked Estelle where the other man was,
and he said he didn't see any other man; he had
disappeared in the meantime; I don't know where
he went to. This is the first time I have seen him
since then. I am almost positive Peter Zurich is
the man I went after who upset the tray.

On cross-examination, the witness testified:
The officers that entered the premises with me on
the Union Street side were Mr. Jordan, Mr. Drew
and Mr. Estelle. We entered on the Union Street
side which takes you into the restaurant proper,
right where the little boxes are. We went into

48 Louis Cabiale and Andrew Donizello

(Testimony of Samuel Shaen.)

the main dining-room at first. I saw Mr. George
Poultney in there. I grabbed a glass of liquor
from Mr. Herbert, one of the men sitting at Mr.
[37] Poultney 's table. I took it up to the counter
where Mr. Kupser was standing and handed it to
him to keep, to hold it for evidence. I did not
see what Mr. Kupser did with the evidence. I
then went into the bar. I stayed in the main
dining-room just a few minutes; there was excite-
ment among the guests; the people got up from the
tables; there was not much else to do right there,
and I went into the bar. I was not served with
anything. I saw people being served, and, as I
say, they asked me if they could not go and collect
money for w7hat they had served. I did not see
this man serve the liquor (referring to the defend-
ant Donizello). I found this bottle labeled ' Ver-
mouth' behind one of those sliding glass doors be-
hind the bar. I did not sample it; I don't think
I even smelled it. I do not knowT who found the
other stuff there, of my own knowledge; Thomas
and I were searching behind there. Mr. Wolfe was
in front of the counter. Smith was on the outside
of the counter. He was not doing any searching
at that time. I don't know7 w7hether he did any
searching at all. I am only talking of what I
know7 as to who was behind the bar. I think most
of the stuff that was carted away was on the coun-
ter— there might have been one bottle found after I
got through there, but at that time Wolfe was in
front of the counter to see that it would not be

vs. The United States of America. 49

(Testimony of Samuel Shaen.)

taken away by anyone. I don't know who placed
all of these bottles in a box. I went down with the
hox to the wagon. The box was not particularly
in my custody; we were all there and left together
and placed the stuff in the Custom-house. There
were only four in the bar at that time. The other
men only know what I found there by what I told
them. They saw it taken away from there, be-
cause we went down in the patrol wagon with
them. I think Thomas found three bottles before
I got there. (To the Court.) I think there were
six or seven altogether. I did not label the bottles
myself. They were not labeled in my presence. I
recognize those two particular bottles I found. I
found that bottle of vermouth and I said to Thomas,
made the remark, "Here is a bottle of vermouth ";
and then I found that bottle. I know that bottle
by that straw stuff around that maraschino bottle.
[38]

On redirect examination, the said witness testi-
fied:

The liquor that is here in the bottles that I se-
cured at the Gianduja place was taken into the
Custom-house, into the room that I opened. I
opened the door to let them bring it in. Subse-
quently it was taken out of there by some one and
taken to the chemist for analysis. Who took them
up I don't know.

On recross-examination the said witness testified:
I could not tell you positively how soon after this

50 Louis Cabiale and Andrew Bonizello

(Testimony of Samuel Shaen.)

raid the bottles were taken to the chemist. I did
not keep a record; the agent would bring in things
— they would just bring them in and label them,
and they would then go into a room that we had,
another room altogether which we kept under lock
and key. I am not the custodian of the property
seized. There was only one key to the room; we
had it in Mr. Considine's office. An agent, when
he seizes any property at all for the evidence brings
it down and labels it himself, and then he takes it,
as a general rule, to the chemist himself, for analy-
sis; the chemist then makes a report to our office
in duplicate, of anything that is taken up to him,
but there is no record kept by me or anybody else,
except they get a report from the chemist. The
man who makes the seizure keeps the record him-
self. I do not know, in the case of these particular
bottles, who took them to the chemist. They were
labeled by someone else, someone who was con-
nected with the raid. The fact that I found those
two particular bottles cuts no figure, because
Thomas got some, and maybe somebody else got
some, and one man attended to all of that, one of
the men who was in the expedition. As far as
labeling is concerned, one man does that part. It
does not make any difference which one in the
party does it, as long as it is done.

vs. The United States of America, 51

Testimony of William J. Jordan, for the Government

WILLIAM J. JORDAN, called as a witness for
the United States, and being first duly sworn, testi-
fied:

I am a prohibition agent and have been such for
all of this year. I was present at the raid that was
made on the place known as the Gianduja place,
where these defendants were found. That night,
Mr. Shaen, Mr. Estelle, Howard Drew7 and I went
into the Union Street entrance, and as we went in
the door this gentleman [39] over here on the
left, that one with the bushy hair, he was coming-
in with a tray of wTine (referring to Attilio Por-
cellini). I went in and he passed in front of me,
and he had a tray with him with six or eight glasses
of wine on it. I stepped around, ahead of him,
and asked him, "What have you got there?" and
he asked me, "Who are you?" and I flashed my
badge and told him who I was, and so he immedi-
ately took the tray and threw it up into the air,
and so I grabbed him and brought him over and
turned him over to Howard Drew. By "throwing
it up in the air," I mean he spilled it before I had
a chance to grab it, and he made the remark it wTas
grape juice. So we went around the place and
picked up some wine — I did not — some of the other
men did — and Poultney and Herbert were sitting-
down to the table, and Shurtleff and Kupser went
over and took some of their wine — Shurtleff, I
mean; Kupser was over at the cashier's desk — and
they brought the drinks over. Donizello was by

52 Louis Cdbiale and Andrew Poiiizcllo

(Testimony of William J. Jordan.)
the cash register, and this man here with the mus-
tache was in the bar, the big fellow. Forasiepi
was serving wine around there, and he was just
coming out of the saloon part of it, so somebody
said to me, "You had better take care of him.'r
He wanted to get his coat and wanted to collect
some bills around there from different people at
the tables; then finally he got his coat and we got
into the wagon and took them down to the city
prison, and he told me he had a wife and three or
four children, and he did not want to go to jail that
night, so I told him all right, he could go home, I
did not want to worry his wife and children, and
we could pick him up next day, which we did. At
the end, just before we went out, the liquor was
all together on the end of the bar; it was in a box,
so Wolfe went and called the patrol wagon, and
we took these gentlemen and put them in the patrol
wagon.

The COURT.— Which ones?

A. The man on the end, this man with the mus-
tache, this man here. There were four of them in
the wagon.

Donizello was in the wagon that night, and the
man with the mustache and the man on the end,
and the other man I don't remember. This liquor
that was procured or placed in bottles was put ill
a box and we took it down to the Custom-house.
From that place it was taken by some one to the
chemist. [40]

VS. The United States of America. 53

(Testimony of William J. Jordan.)
On cross-examination, the witness testified:
I did not make any test there. I did not see
anybody else make a test. There is a door that
fronts right on Stockton Street, which we will call
the easterly door, and there is a corner door which
enters the bar. I came in the door on the Union
Street side that is not anywhere near the barroom.
When I came into the place I saw Mr. Kupser up
there by the cash register, behind this crescent-
shaped counter, that is in the dining-room proper.
Donizello was beside Kupser, he was not attired as a
waiter. Mr. Shaen was not with me all the time. You
see there were 300 or 400 people around there, and as
soon as we got in the door I went after the waiter,
and Mr. Shaen was not with me all of the time.
The man that I grabbed was the man over at the
end with the bushy hair. I did not take him in
the police wagon, someone else took him. I do
not know if Mr. Shaen saw him between that day
and now. If I remember, Mr. Shaen went down
to the police department with me. I can identify
three of the defendants that went down to the
station at that time; I cannot identify the fourth.
I let the man with the mustache go home. He told
me he had a wife and two or three children, and
they would be worried if he did not come home,
and I told him he could go and we would pick him
up later. This other man, Porcellini, had a tray
with 5 or 6 glasses on it, full of wine. I know
wine, I can tell wine by the smell of it. I can
pretty near tell it by sight w7hen they knock it all

54 Louis Cabiale and Andrew Donizello

(Testimony of William J. Jordan.)
over you and you get it over your hand. I didn't have
a chance to distinguish the color, but it was the
color of wine. As soon as he saw my badge he
threw it up and spilled it all over me, and then I
hustled him along to the dance hall. Poultney and
his party were sitting to the left, coming in from
the Union Street entrance.

Testimony of Harry Z. Drew, for the Government.

HARRY Z. DREW, called as a witness for the
United States and being first duly sworn, testified:

I am a United States Prohibition Agent and was
last July. I was present at the time of the Gian-
duja raid. I was placed in charge of the Union
Street entrance to the place, with instructions to
let nobody out until I received [41] further
orders from the Deputy Chief Agent, Mr. Jordan.
I remained there, with two of the waiters in my
custody, until the place had been searched; the two
waiters were then turned over to Mr. Shaen to go
down and change their clothes. I went in charge
and took charge of a box containing six bottles of
liquor, and removed it to the police patrol, where it
was taken as far as the Hall of Justice, and from
the Hall of Justice Agent Smith and myself car-
ried the box containing six bottles of liquor down
to the Appraisers Stores Building, and placed it
in the storeroom set aside for that purpose. As
to the raid, I don't know a great deal, excepting
that I took charge of one waiter, who was strug-
gling with Agent Jordan at the time, and I held

vs. The United States of America. 55

(Testimony of Harry Z. Drew.)

him there. They had a struggle over a glass of
something that the waiter had in his hand. Agent
Jordan called to me to come and take the man, and
I took him out near the Union Street door and
held him there. Another waiter was later on
turned over to me. I can identify Porcellini and
the second man from the wall. I would say that
these bottles are the bottles that I saw that night in
the box.

i On cross-examination, the witness testified:

Four of us entered that Union Street door, that
is the door that leads into the restaurant proper.
I am positive of my identification of the heavy-set
man as being the one I arrested that night. I held
him there just inside the Union Street entrance.
The man turned over to me by Jordan was Porcel-
lini. I would not say for certain how long I was
at that door; I would judge in the neighborhood
of half an hour, a little more or less. I didn't
observe whatever was found there until after it
had been gathered and placed in the box. All I claim to
know about it is that I saw the stuff in the box, and
placed it in the box, but I did not see it gathered up.
The corks were sealed, with the exception o|E one bottle.
I did not see the bottles labeled. I do not know
who took them to the chemist and I don't know
who labeled them. I don't claim those labels are
restricted to those bottles only. I did not accom-
pany those waiters to the city prison. I rode down
as far as the city prison on the patrol wagon, and
when we arrived at the city prison Agent Smith

56 Louis Cabiale and Andrew Donizello

(Testimony of Harry Z. Drew.)

and I took charge of the box that contained the
[42] bottles, and walked down to the Appraisers
Store Building with it, and put them away. Agent
Smith and I put the box in the room where the
evidence is kept. Agent Smith had a key to the
room. He accompanied us, as did also Agent Jor-
don. Practically all of the agents that could get
on the patrol wagon were on it as far as the Hall
of Justice. I could not see what Porcellini, the
man whom I say was grabbed by Mr. Jordan, was
carrying because just at the time I had not been
able to quiet some of the people down yet who at-
tempted to get out of the place; my instructions
had been to allow nobody to leave until I received
orders to that effect. Some of the patrons became
very much excited. I guess the majority of the
people there made a rush for the door I was stand-
ing in front of, and I had quite a little time getting
them back and in quieting them down and explain-
ing to them that they would not be held in any way.
Several of them were under the influence of liquor,
and it took quite a little talk to them to get them
to go back ; in fact, I had to make a display of force
to get them to go back, in order to protect myself.
The force I used was a Colt's revolver. I allowed
them to get within three feet of me, and some of
them looked as though they might go too far un-
less I used means to stop them. I was alone at
the time at the door. I did not see what Porcellini
was carrying at the time. At the time I went to
the assistance of Mr. Jordan, I did grab that man,

vs. The United States of America. 57

(Testimony of Harry Z. Drew.)

as you say, and pulled him out in the entry way.
Agent Jordan told me to handcuff him. At the
time I did not have handcuffs with me. He made
the remark not to mess him up, and I told him to
be quiet and nothing would happen to him and he
wTould not be messed up. I did not see Coppola
with anything in his possession.

Testimony of A. L. Estelle, for the Government.

A. L. ESTELLE, called as a witness for the
United States and having been duly sworn, testi-
fied:

I am, and have been for a year or so, a prohibi-
tion agent. Two years prior to that I was an army
officer. I accompanied the raiding party to the
Giandjwa place on the 23d of July of this year. I
entered the place, accompanied by three other
agents, Mr. Jordan, Mr. Shaen and Mr. Drew.
We entered from the Union Street entrance. I
was designated by Mr. Jordan, who was the [43]
head of our party, to take charge of any persons
that might be arrested and turned over to me. I
stopped just inside the entrance, opposite the
checking-stand. Two prisoners, two waiters, that
is, men in waiter's clothing, were turned over to me
to keep there while the raid was going on. I kept
those waiters there until the raid was finished, and
I turned them over to Mr. Drew. I wTas put in
charge of the prisoners, and I took them to the
city hall and booked them, accompanied by Agent
Wolfe. That was the part that I played in it.

58 Louis Cabiale and Andrew JDonizello

(Testimony of A. L. Estellc.)

When I went down into the barroom, there were
six bottles in a box setting on top of the bar, near
the end of the bar; I saw them there. Mr. Wolfe
was standing there, with a search warrant; he was
standing near the bottles. They were turned over
to two of our agents, Mr. Smith and Mr. Drew.
I do not know of my own knowledge where the
bottles were taken. The four standing on Mr.
Geis' table and the two on the clerk's table are the
same bottles. Yesterday, at your direction, I went
to Mr. Copestake, who had charge of them up in
your office, and asked for them, in order that I
might take them to our chemist for analysis. They
were turned over to me and I then carried them
down and turned them over to the chemist, Mr.
Love. At that time five of them were sealed and
one was not.

On cross-examination, the said witness testified:
Yesterday I took the bottles to the chemist, two
of which are introduced in evidence and are on the
clerk's desk, and four that are on his table. As far
as I know that was the first time they had been taken
to the chemist. I don't know of my own knowledge
who brought them up to Mr. Copestake. I did not
place any mark of identification on those bottles
when I took them from Mr. Copestake. I know by
their looks, and the lables on the bottles, that they
are the same. I don't know how many people were
in this restaurant on the night of July 23d. In the
portion next to me, where they were dancing, I

vs. The United States of America. 59

(Testimony of George R. Poultney.)
would estimate it at probably 100 people. I would
say, altogether, that I stayed at the Union Street
entrance door, thirty minutes.

Testimony of George R. Poultney, for the
Government ( Recalled) .

GEORGE R. POULTNEY, recalled for the United
States, testified:

Referring to the two bottles sitting on the clerk's
desk and the [44] four bottles before me, I
brought those bottles in a box to this office and
turned them over to Mr. Hardie, to the United States
Attorney's office. I got them from the Appraisers
Building in the room that is kept for the liquor.
They were in the same condition when I turned them
over to Mr. Hardie as they were when I took them
out of the appraisers building. The small bottle,
that the tag is in my handwriting, I took that to Mr.
Love, the chemist. The contents are the same as
when I took it from the Gianduja place.

Testimony of A. M. Hardie, for the Government.

A. M. HARDIE, called for the United States and
having been first duly sworn, testified:

I received the four bottles that are standing on
the table here and the two bottles on the clerk's desk
from Mr. Poultney. At that time I had the key to
our liquor safe and I placed them in the safe. They
are now in the same condition as far as the contents
are concerned, as they were when Mr. Poultney gave

GO Louis Cabialc and Andrew Donizello

(Testimony of A. M. Hardie.)
them to me. The contents of the bottles at the
present time are the same contents as when I got
them from Mr. Poultney.

Testimony of R. F. Love, for the Government.

R. F. LOVE, called for the United States and
having been first duly sworn, testified:

I am employed by the Government of the United
States as a chemist. I have seen United States
Exhibit No. 4 for identification. At the time that
bottle was handed to me it was sealed. I analyzed
it; I determined the alcoholic content of it. It
analyzed 33.1 per cent alcohol by volume. I re-
ceived the bottle from Mr. Estelle. I analyzed
United States Exhibit 5 for identification, and the
result was alcohol 2.55 per cent by volume. I re-
ceived from Mr. Estelle a bottle referred to as being
in the box. I analyzed it, with the result, alcohol
17.8 per cent by volume. Another bottle, hereto-
fore testified to, I analyzed with the result, alcohol,
48.6 per cent by volume. (To the Court: I think
that one contained whiskey). Another bottle testi-
fied to as being in the box was handed to me by Mr.
Estelle and I made a chemical analysis of it, with
the result, alcohol 45.25 per cent by volume. I
think that was brandy, but I am [45] not sure.
Another bottles testified to as having been in the
box, I made a chemical analysis of, with the result,
alcohol 45.25 per cent by volume. (To the Court:
That would be about 90 proof).

vs. The United Slates of A hi erica. 61

(Testimony of R. F. Love.)

Thereupon the prosecution offered the said ex-
hibits and bottles in evidence, to which counsel for
the defendants then and there objected upon the
grounds that the witness Poultney did not see any
of the said property found and that there was no
testimony that the said witness saw the same in the
box. The Court overruled the said objection. To
which ruling counsel for the defendants duly re-
served an exception.

The WITNESS.— (Continuing.) I made a chemical
analysis of United States Exhibit No. 2 for identi-
fication, testified by Mr. Shurtleff as having been
handed to me for analysis, with the result, 10.3 per
cent alcohol by volume. In my judgment it is claret
wine. I made a chemical analysis of United States
Exhibit No. 1 for identification, with the result that
I find it contains 9.74 per cent alcohol by volume.
In my best judgment the contents of the various
bottles are fit for beverage purposes.

Thereupon counsel for the United States offered
the two last mentioned bottles in evidence, to which
counsel for the defendants made the same objection
stated to the rest offered. The court overruled the
said objection, to which ruling of the Court counsel
for the defendants then and there duly excepted.

On Cross-examination, the said witness testified:
I did not drink any of the contents. I did taste
one or two. I think I tasted the one labeled Ver-
mouth and the one labeled Marasraio. I have never
seen any of that vermouth before. I received the

62 Lords Cabiale and Andrew flonizello

(Testimony of E. F. Love.))

two bottles last identified by me on July 26th. I
know, as a matter of fact, that grape juice in a bottle
will turn to wine. I don't know whether Marascmo
is used for beverage purposes. I placed marks of
identification upon the exhibits furnished to me for
analysis so that by the labeling or by the wording
I identify the contents. In making my analysis of
United States Exhibit 2 I would say it was all wine.
(To the Court: I analyzed it only to ascertain its
alcoholic content). I would say that these two
articles, Exhibit 1 and Exhibit 2 are wine. [46]
Grape juice exposed to the air will acquire the same
alcoholic content as wine when it is originally made,
in time.

On redirect examination, the said witness testified :
For grape juice of the proper standard to turn
into wine, containing the alcoholic content of Exhibit
1 and 2, might occur within three or four days. It
is not absolutely essential to that process that it be
exposed to the air. Some substance, like yeast, is
apt to start fermentation. Grape juice kept in a
bottle without any supplement to it does not turn. If
the air can get in it will ferment. I don't think the
staves of a new barrel are porous enough to allow
enough air to get in to cause fermentation. The
slightest air that may get into that barrel will prob-
ably turn the barrel, or its contents, into wine.

vs. The United States of America. 63

Testimony of A. R. Shurtleff, for the Government

(Recalled).

A. R. SHURTLEFF, recalled for the United
States, testified :

At the time I secured Government's Exhibit No. 1
I sealed the bottle and kept it sealed until I gave it
to the chemist. I suppose it would be exposed two
or three minutes that night.

THEREUPON the Government rested its case.

Thereupon counsel for the defendants moved the
Court for a directed verdict, upon which motion the
following proceedings were had :

Mr. TRAMUTOLO.— If your Honor please, I de-
sire to make a motion for a directed verdict as to a
number of these defendants. Many of them have
been assembled here just because they happened to
be there that night. Why they did not bring the
cooks and utensils along is something I don't know.
But there are a few defendants in this case that have
not been identified as having been there that night.
I desire to recall the testimony of the various officers
as to the people who were identified as having been
there on the particular night of July 23d when this
raid w7as made.

There has been no identification of this particular
man, Gabalio. The sole testimony of Officer Poul-
ney was that he saw Donizello there, and that he
believed that Peter Gabalio was there ; and by saying
he believed — I don't want to misconstrue what the
evidence really was, and any misstatement [47] I
might make with reference to the defendants

64 Louis Cabiale and Andrew Donizello

who have not been properly identified I do not do
it wilfully, I am doing it from my notes that I
made and from my memory. But assuming that
all of these defendants were there, if your Honor
please, the Government must still prove, before it
could expect us to overcome its case, it is not a
prima facie case, the mere presence of an employee
at a place where liquor is found, any more than if
they arrested every individual who was in that
place as aiding and abetting the commission of a
crime, because the people who procured that liquor,
if it was procured from these defendants, are just
as guilty.

The COURT.— Maybe they are.

Mr. TRAMUTOLO.— I anticipated your Hon-
or's point of view, and I do not argue that because
certain ones are eliminated, and some are made
" goats" of, if I can use that term, but there must
be something more to connect some of these people
who have been merely haphazardly identified as
having been there with a direct charge in this com-
plaint or this information.

There are eleven counts in this information; nine
of them are that claret was sold to Mr. Poultney,
who makes the affidavit which the Government re-
lies on to substantiate the charge in the information,
because the information reads, that the affidavit
is hereto attached — you have seen so many of them
it is not necessary for me to go into the point.
The Government relies upon that affidavit. If you
will look over that affidavit, the affiant makes

vs. The United States of America. 65

twelve specific charges of sales. Tf there is one
order placed hy Mr. Poultney — which is true, he
placed one order Thursday night, and one order
Friday night, the service to those four individuals
at that time does not constitute four separate viola-
tions, it constitutes one transaction, for which there
has been no proof that any money was paid. In
addition to the place being conducted as a common
nuisance, we are obliged to meet the charge of a
direct sale to Poultney. There are eleven counts
in the information, and still the affiant has made
twelve separate statements in his affidavit, or that
he made twelve separate buys. Now, either it was
charitable on the part of Mr. Geis or of Mr. Hardie,
because they only placed eleven counts. There is
an inconsistency between the [48] averments in
the information and the proof. The affidavit wras
made by Mr. Poultney in this particular case.
Who did Poultney say served him with this liquor?
If my memory served me right, if my hand did not
write something that my mind did not wTant put
down, he testified that on Thursday night he saw
Cabiale there, the gentleman who is seated right
behind here, and the gentleman behind him, Mr.
Donizello, and that he believed that Gabalio wras
there, and that Mr. Donizello took his order, and
that the service was made by Coppola, the gentle-
man sitting the last one over there. The identity
of a number of these defendants — and the Govern-
ment should be frank enough to state to this Court
and to this jury, and particularly to this Court,

66 Louis Cabiale und Andrew Donizello

those who it would compel to take the stand and
state that sales were made. Mr. Poultney did not
pay any money. We are meeting the charge of
selling.

The COURT.— That does not affect the sale.
Many a man sells his property and never gets any
money for it.

Mr. TRAMUTOLO.— It is apparent that Con-
gress had in mind the transaction of a sale.

The COURT. — You knowr what a sale is. A sale
does not involve payment.

Mr. TRAMUTOLO.— But Congress must have
had that in mind, because it says, " Whoever shall
furnish.. "

The COURT. — There is no necessity of arguing
that. You are too good a lawyer to know that a
sale does not require payment. He may owe it to
him yet, he probably does.

Mr. TRAMUTOLO.— But we will wait a long
time to collect it, your Honor.

The COURT.— If you undertake to collect, he
might well defend the declaration that it was an
unlawful transaction. I will let the whole matter
go to the jury. Motion denied.

Mr. TRAMUTOLO.— I will reserve an exception.

The COURT.— We will meet to-morrow at ten
o'clock, gentlemen.

Mr. TRAMUTOLO.— Before adjourning, may I
make an objection which I intended to make at this
time? At the time the books were introduced, on

VS. The United States of America. 67

the additional ground that they are not the best
evidence. [49]

The COUET.— I don't like post mortem objec-
tions, but you can make it.

Mr. TRAMUTOLO.— It is not the best evidence.

The COURT. — No, the best evidence would prob-
ably be the man who would come along and say,
"I sawT him sell the whiskey."

Mr. TRAMUTOLO.— Then I will reserve an ex-
ception.

The COURT. — I rather agree with your idea,
though, that they cannot split up one sale into
twelve different transactions.

Mr. TRAMUTOLO.— There were only two sales
made.

The COURT. — That is enough to support the
proposition. The case will go to the jury under
proper instructions. I don't think the Government
makes anything by undertaking to split up one
transaction into fifty, for instance.

Mr. HARDIE. — There are eleven counts, two
counts charging maintaining a nuisance, five counts
charging sales, two counts charging possession, and
two counts charging furnishing. There are not
twelve sales alleged, there are five sales alleged.

Testimony of W. D. Smith, for Defendants
(Recalled).

W. D. SMITH, recalled by the defendants, testi-
fied:

I was in court when Mr. Shaen testified yester-

68 Louis Cabiale and Andrew Donizello

(Testimony of W. D. Smith.)

day. I heard his testimony as to having found the
maraschino and the bottle of vermouth. I could
not say which of the liquors that had been intro-
duced by the Government were found by me. I
was not there when the bottles were found. Some-
body filled the bottles with the stuff in the pitcher,
I did not see it done. I did not see the sealing.
I do not know who did it.

Testimony of Louis Cabiale, for Defendants.

LOUIS CABIALE, called as a witness on behalf
of the defendants and having been first duly sworn,
testified :

I reside on the second floor of the premises at
1529 Stockton Street. The upstairs is used for a
hotel and the lower floor is a restaurant. I am
one of the proprietors of the Gianduja Restaurant.
I have been in business there about five years. I
am a married man of family. I have a record here
that shows all the checks. The government wants
that, on account of the war [50] tax. And it
show7s everything from some time in December to
now; there are all the checks that have been used
on my premises, so that we can check it up and
see if I had that check on the 23d of July. The
cash register has two rollers, one is out of order,
and we never use it, because it does not work, it is
out of order. Every night I check up all the wait-
ers. Whenever I find any mistakes, I put those
checks in that drawer, which we do not use for any-
thing else. I have the record right here. Waiter

vs. The United States of America. 69

(Testimony of Louis Cabiale.)

No. 10 on July 22d was an extra waiter by the
name of Harris. He did not have serial number
34. Seven waiters worked on the night of July
23d. None of these seven waiters have any base
number 34. I have kept this particular record
since some time in December 1919 up to last night.
No waiter with serial number 34 worked in my
premises since December 15, 1919. I have to keep
the record; the Government wants you to keep a
record of all the serial numbers of checks, on ac-
count of the war tax, that we pay in a cabaret ; any
place where there is any sort of entertainment we
have to pay a war tax, and we have to keep a rec-
ord of all the tags. I have my checks for the
months of July and June, also, I have the tags
right here. The checks here represent June and
July. The receipts are inside showing that I paid
the tax upon the checks totaled.

Mr. TRAMUTOLO.— I offer these as Defend-
ants' Exhibit "A."

Mr. GEIS. — What is the purpose of introducing
the other ones in June?

Mr. TRAMUTOLO.— Your contention is there
is a public nuisance conducted there. We have
records which could not be changed; the defendants
are obliged to keep them, because the Government
is entitled to a tax, and I think they should go to
the jury for the purpose of showing that sales of
liquor have not been promiscuously made. The
Government has brought here some isolated checks,
and I think that we are entitled to let the jury see

70 Louis Cdbiale and Andretv Vonizello

(Testimony of Louis Cabiale.)

these tags; they show the volume of business that
is being done, and certainly they could be checked,
if they desired to do so, by going through the vol-
uminous number of checks, to see whether sales
were promiscuously made.

The COURT.— I did not understand that there
was an objection made to it. [51]

Mr. GEIS. — I make an exception to it on the
ground that they are immaterial, irrelevant and
incompetent in so far as applying to any other date
except the date of July 22d and July 23d. It
would probably take the Court and jury two weeks
to run through this, and it is needlessly encumber-
ing the record.

Mr. TRAMUTOLO.— You can go through them
and check them and see if the Government has been
paid.

The COURT.— The objection will be sustained.
The witness may make any explanation he desires
of these checks, but the introduction of the other
checks is denied.

Mr. TRAMUTOLO.— I will accept that modifica-
tion and not urge that the others go in.

Q. Did you look over the checks for the month
of July, particularly the dates of the 23d and the
22d of July — did you look over those checks?

A. Yes.

Q. Is there anything on there showing or indi-
cating the sale of intoxicating liquor?

Mr. GEIS.— We object to that on the ground it
is not the best evidence.

vs. The United States of America. 71

(Testimony of Louis Cabiale.)

The COURT. — The objection will be sustained.
It is apparent that if the defendant was violating
the law that he would not be making a record of it
wdrich he must submit to a Government officer.

Mr. TRAMUTOLO .— Your Honor, it is a ques-
tion of whether this man was deceiving the Govern-
ment—

The COURT. — That is not the question we are
trying. His own record, made out by him, could
not be admissible.

Mr. TRAMUTOLO.— It is not made out by the
defendant himself, but by the waiters.

The COURT. — Or by waiters wTho, if violating
the law, would be just as guilty as he. You cannot
disprove this charge by showing that no record has
been made of it. He has an explanation of that
check, he has said it might have been there, but you
cannot show that liquor has not been sold there
by showing that no record has been made there of
sales of liquor.

Mr. TRAMUTOLO.— We note an exception.
[52]

The WITNESS.— (Continuing.) I know Mr.
Poultney. I have seen him several times with dif-
ferent officers that I know. I know several prohi-
bition officers. I saw Mr. Poultney in my place
of business on the night of Thursday, July 22d.
I heard his testimony. Mr. Poultney came in and
asked me to — he said he didn't know what to eat,
and I said, "I will fix your dinner all right/' and
I took him to a table and sat him down in a private

72 Louis Cabiale and Andrew Donizello

(Testimony of Louis Cabiale.)

room, and I went into the kitchen and ordered a
dinner. I did not serve him with any liquor. I
did not order the w7aiter who waited on him to serve
him any liquor. I do not know- whether he was
served with liquor that night. I don't remember
who waited on him. The regular waiter that
waited on the private rooms was gone at the time.
Coppola is the regular waiter. He was not there
that night. I w7as not present Friday night, the
night of the raid. In the daytime I went across
the bay and at night I went to the moving picture.
We have French vermouth and Italian vermouth,
which has been put up by a firm here known as
nonalcoholic beverage, and we have sold it for
nonbeverage purposes, because the label says it con-
tains not more than 1/10 of 1 per cent of alcohol.
Neither I nor anyone, to my knowledge, added any
ingredients to increase the alcoholic content of that.
I have other bottles of this kind, the same liquid.
I brought one into court. The Government's Ex-
hibit 4 for identification is maraschino. It is a sort
of extract that we use for flavoring sabajon and
some of the desserts that we make. Sabajon is
made with eggs, stacked up with ice, and we put
just a couple of drops in there to flavor it. It is
not sold in my place for beverage purposes. (To
the Court: The kitchen is about 25 feet from the
bar.) I do not know of my own knowledge whether
any sales of liquor were made in my premises by
my employees on the nights of July 22d and July
23d. I knew Poultney prior to July 22d and knew

vs. The United States of America, 73

(Testimony of Louis Cabiale.)

what his occupation was. I have many times had
trouble with patrons coming into my place with
liquor. I have stopped dinner for that several
times. I could produce the waiter that could tes-
tify to that. People have come in there and put
wine or liquor right on the table. Of course, I
could not go there and stop it, because I am not an
officer, but I have gone to them and told them to
get the liquor away, and if [53] they did not do
it I would stop dinner, and I did it many a time.
After their eating soup or salad I have stopped
their dinner, and some of them I didn't even want
to collect their checks. I said, "You don't pay
anything, go out." Some objected to paying, say-
ing that they had not finished the dinner, and that
they wouldn't pay for the dinner, and I said,
"Don't pay for the dinner, go out of my place."
Some brought it in in their pocket; I don't know
what they brought in; if they kept it in their
pocket I could not go and search them. In fact,
I am sure they brought it not only to my restau-
rant, but other restaurants. I know it by the fact
that every morning, if you would go to any restau-
rant, you would find some empty bottles under the
tables, in every place in town. I have been at that
restaurant five years. My lease has about six years
to run. I have been endeavoring to dispose of my
place but I have been unable to find a purchaser.
I pay $510 a month rent. Since the trial of this
case I have made an investigation with reference

74 Louis Cdbiale and Andrew Donizello

(Testimony of Louis Cabiale.)

to the grape juice that I have bought, as to its turn-
ing into wine.

I asked some experts about that question, if it
was possible that in a short time the grape juice
would turn into wine. So I was told that the grape
juice would not only exposed to air, but sometimes
being in an average temperature room like this
room, here, it can turn into wine. So I have taken
it all away from my premises. I have put some
into vinegar barrels to make some vinegar out of
it. I know that from now on that they have a new
process of keeping grape juice, and I hope in the
future I will be able to get grape juice without
running the risk of its turning into wine. But so
far as the last four or five months has been con-
cerned, it has been very difficult to keep it. In
fact, in all the new barrels that they put grape
juice in they have to put some paraffine in, because
they have found out that the pore, itself, that is,
the wood, the air goes through it, and the grape
juice turns into wine — only from the air that comes
into it. They have proved that, and you can ask
any dealer in grape juice, and they are putting
some paraffine in every barrel. The other owners
of the premises are Donizelli and Majori; the latter
is in Italy. [54]

On cross-examination, the witness testified: I
never met Mr. Poultney, but I saw him with some
prohibition officers in this court. I came to court
several times on cases. I did not come here to
see who the prohibition officers were because I

vs. The United States of America. J5

(Testimony of Louis Cabiale.)

know them pretty near all. I know all the agents
that have been with the revenue office for a long time.
I used to go, years ago, to the revenue office to pur-
chase stamps for wine and pay the war tax. In
fact, I have known Jordan for years and I have
known Shaen for years. I saw Poultney in court
with some of the revenue officers that I know. I
don't remember what other prohibition officers I
saw him with. This book before me shows that
on July 22d and July 23d there was no check of
that serial number that was found in the cash
register. This column of figures represents the
serial number on which they began work. On July
21 waiter No 1 begins with serial number 274, and
so on. This number here on the left-hand margin
is the number of the .waiter. On the 22d wTe had
a waiter No. 10. On the 23d I had only seven
waiters. I remember Mr. Poultney coming into
my place on the 22d with a lady. He told me to
order dinner for him. Generally I do not take
orders but the waiter takes them. He told me to
fix up a dinner for him, so I did. He did not say
what I should order for him, or anything like that,
so I started in ordering for him, He gave no spe-
cific order, except a general order that he wanted
dinner. I went into the kitchen and ordered some
salad and some meat and some pastry; I don't re-
member exactly what I ordered; I remember it was
a combination salad and some meat. I gave the
order to the waiter. I did not write it out. I told
the waiter to write it out. I did not go back to

76 Louis Cabiale and Andrew Donizello

(Testimony of Louis Cabiale.)

the table at all. I have no checks which the result
of the meal. If he ate in the public dining-room
I would have the check, because we keep all the
checks of the dining-room for the wrar tax, but in
boxes they are not subject to the war tax, so we
just throw them away. We had no liquor on the
premises. We have grape juice, and apple cider,
and Manhattan and Martini cocktails, vermouth —
all this stuff that they put up now, nonalcoholic
drinks. We serve grape juice from the bar in a
pitcher. We do not serve any beverage from any
other place in the building. [55]

Testimony of Frank Coppola, for Defendants.

FRANK COPPOLA, called as a witness on be-
half of the defendants and having been first duly
sworn, testified:

I am the defendant mentioned in the information
as Colai. I have been employed nearly eight years
at the Gianduja Restaurant. I am a waiter. On
Thursday, July 22d, I quit about half-past seven
or eight o'clock. I did not serve liquor to Mr.
Poultney or any other person in the restaurant.
I work on the Union Street entrance.

On cross-examination, the witness testified:
I did not serve Mr. Poultney with anything. I
was there the night of the raid. I am not the
waiter that tipped over whatever I had on my tray
at the time. I never saw Mr. Poultney at all.

vs. The United States of America. 77

Testimony of Peter Zurich, for Defendants.

PETER ZURICH, called as a witness on behalf
of the defendants and having been first duly sworn,
testified :

I have been working as a waiter at the Gianduja
Restaurant about three months. I teas the night
of July 23d, the night of the raid. I did not serve
any liquor to Mr. Poultney, or to any other revenue
officers that night. I did not have any liquor in
my possession, carrying it on a tray. No tray wTas
knocked out of my hand.

On cross-examination, the said witness testified:

I start in about five and I work until about 12
or 1. Sometimes I go home early. The restau-
rant is open in the morning, I think either 11 or 12
o'clock. On that night I waited on the people if
they sat at my table. I served grape juice. I
served whatever was in the pitcher, for that they
charged 25 cents and during the cabaret 50 cents.
By ' cabaret' I mean while the girls were dancing
for the amusement of the patrons.

On redirect examination, the said witness testi-
fied:

The owners do not employ dancing people. The
people dance. There are a couple of musicians and
a singer, I think.

On recross-examination, the said witness testi-
fied:

Sometimes they have a man or woman singing.
There is one piano and one banjo, and a fellowr that
plays a xylophone; about three musicians. [56]

78 Louis Cabiale and Andrew Donizello

Testimony of Dante Forasiepi, for Defendants.

DANTE FORASIEPI, called as a witness on
behalf of the defendants and having been first duly
sworn, testified:

I am a waiter at the Gianduja Restaurant and
have been working there three years. I'm an Ital-
ian by nationality. I was present on the night of
July 23d, the night of the raid. I saw Mr. Poult-
ney that night. I did not serve him with any
liquor. I did not have any liquor in my possession
that night, never; not before or after.

On cross-examination, the witness testified:
I was there during all the evening of July 23d,
up till the time the raid was made. I served the
patrons that night w7ith the beverage that was in
the pitcher behind the bar. I made a charge of
25 cents a glass. When the dance was in progress
the beverage that was in the pitcher was 50 cents.
The dancing usually began about half-past eight
or thereabouts. I do not know precisely the exact
hour; it depended on the crowd that was there. I
am the man that the prohibition agents allowed to
go home that night. I simply was found with that
empty glass in my possession with nonalcoholic
beverage in it. On that evening I did not go into
some portion of that building and declare to the
persons present that there were revenue officers
there. I didn't say anything, because they didn't
allow me to even get out — they would not even
allow me to go and collect money. One of these,
because I was glancing over the glass door, just hit

vs. The United States of America, 7!)

(Testimony of Dante Forasiepi.)
me over the shoulder, and I was sore for two days.
I was so confused that I did not say anything.
They did not give me a chance even to leave. I
said nothing to nobody.

Testimony of Peter Gabalio, for Defendants.

PETER GABALIO, called as a witness on behalf
of the defendants and having been first duly sworn,
testified :

I have been employed in the Gianduja Restau-
rant over a year. I am a floor-walker, seating the
people down. I was in the place the night of July
23d. I was on my way out when they came in. I
did not see the raid. I never served any liquor
there in the restaurant at all. I just seat the
people. I was in the restaurant Thursday night,
July 22d. I didn't see Mr. Poultney at all. I have
had difficulty many times with patrons bringing
liquor into the restaurant. Mr. Donizello is in
charge of the cash register. Prank [57] Cop-
pola works on the Union Street side; he does not
work in the main dining-room at all and has not
worked there since I became floor manager. The
dance hall has been in the Gianduja Restaurant
about a year and a half, and we have had an or-
chestra and a singer there for about the same time.

On Cross-examination, the said witness testified :

On that evening I was there until about half past

ten. I went there at five o 'clock. I was on my way

out when the people was coming in, so I didn't stop.

I never serve the patrons, I just seat them down,

80 Louis Cabiale and Andrew Donizello

(Testimony of Peter Gabalio.)

that is all. I never take any orders. I simply send
a waiter to them. I know that they always serve
some grape juice out of the pitcher from the bar.
We had it there always. We charge 25 cents a glass.
We charge 50 cents for the cocktails. The mixture
that I call cocktails was served every night.

Testimony of Andrew Donizello, for Defendants.

ANDREW DONIZELLO called as a witness on
behalf of the defendants, and having been first duly
sworn, testified:

I have lived in the city and county of San Fran-
cisco 27 or 28 years. I am a married man wTith three
children. I am one of the owners of the Gianduja
Restaurant. I was in the restaurant Friday even-
ing, July 23d. I was dressed like I am now7. Never
in my life did I wear a waiter's suit. I was taking
criie of the cash register. Mr. Kupser, the prohi-
bition enforcement officer was by me by the cash
register all evening. I saw the checks that were
taken out of the cash register. I handed them to
Mr. Kupser, I handed him several checks. I believe
there were 21 or 22 checks there. It is a National
Cash Register, double rollers — two drawers, A and
B. The tags were in the B drawer. No. 10 waiter
with serial number 36 or 34 did not work that night,
and waiter No. 10 did not work July 22d. These
checks were there a long time, because there are
mistakes even on the part of the Government, the
revenue, that we have to pay; sometimes there is a
mistake of them, or a mistake in the house, where

vs. The raited States of America. si

(Testimony of Andrew Donizello.)
the waiter don't charge right, and we put them away
and correct them with the waiter when he comes
back the next day. On Sunday and Saturday we do
more than twice as much business as other times,
and we have waiters come in, extra men, and they
[58] do not come back, and we keep the checks.
If there is anything wrong, when the Government
•comes up, we have to have the checks, so as to ex-
plain by the checks. These checks we have a long-
time, and that is where we keep them, in the drawer
that we do not use. This check don't belong to this
year, it might be a year old, I don't know how old
it is. I am positive it is not a check that could have
been used on July 22d or 23d because I can tell by
the number, by the way it runs. I think I have been
connected with the Gianduja Restaurant about five
years. I have been trying to dispose of the place
for several months but we have no buyers. I never
served any liquor during five years. I did not
authorize any of my employees to serve any liquor
to Mr. Poultney or to any other individual. I am
on the cash register and taking money in. I know
some waiters have come to me and said that some of
their patrons there have got a bottle on the table,
and sometimes I am busy with the cash and have
not time, and I call my man and tell him to go over
there and see if they have got any liquor, and if
they have, to take the liquor away, because we are
not allowed to keep it. Sometimes I go myself, if
I can get time, but it is a long ways, sometimes, from
the cash register, and sometimes I can't do it; but

82 Louis Calriale and Andrew Donizello

(Testimony of Andrew Donizello.)
if I can't do it I have the waiter go to the table and
ask them to take the liquor away. Sometimes we
will find in the morning empty bottles. About a
wreek ago I found a flask about half full of sherry
wine under the table. It was by the end of the table,
and when the man swept in the morning, like you
would do here, that is what he found, he said, and
some other times we have found other bottles with
some other stuff in; many times we have trouble in
that way ; wTe do not want them to bring it in.

On cross-examination, the said witness testified:
As proprietor I have supervision of the service
that is made to patrons. When I have time I go
through the dining-room and various places to see
that patrons are served. I know what patrons re-
ceive by way of service in my restaurant. Whatever
may be served is served with my knowledge and
authority. I can't remember the day that the check,
that was handed to me by Mr. Tramutolo, was made
out, because [59] it is an old check. I can't tell
you the exact date. I could not say how old it is
because wTe have got numbers since then; the book
will teH ; we can find the serial number and the num-
ber of the waiter. I could not estimate the date.

Testimony of G. Bertolotti, for Defendants.

G. BERTOLOTTI, called as a witness on behalf
of the defendants and having been first duly sworn,
testified :

I have lived in San Francisco about ten years
and have worked at the Gianduja Restaurant about

vs. The United States of America. 83

(Testimony of G. Bertolotti.)

four months. I was there the night of July 23d,
when the place was raided. I was outside of the
counter. I was serving as a waiter. The bottle shown
me contains maraschino. It is used in the kitchen
in order to flavor sabajon. I saw that bottle there
that night. It is nonalcoholic and it is on the mar-
ket and sold in every place. I never saw the four
bottles. We just had a pitcher full of grape juice.
We did not have any brandy behind the bar, or any
whiskey. We did not have any wine; I had grape
juice and these two bottles. The grape juice was
in the pitcher on the bar inside. On the night of
the raid I did not serve any wine to any body, nor
did I serve it on Thursday night, July 22d. These
Manhattans or Martinis are not made of alcohol.
The liquor served to patrons on the evenings of
July 22 d and 23d was nonalcoholic.

Testimony of Attilio Porcellini, for Defendants.

ATTILIO PORCELLINI, called as a witness
for the defendants and having been first duly
sworn, testified:

I have been employed at the Gianduja Restau-
rant for three and one-half months. I was there
the night of July 23d. I was seized by three or
four officers that night. When I was seized I had
three or four glasses, one of Bevo Beer, one of
lemonade, and one of grape juice, and I don't re-
member the other. I did not throw the contents
of that tray away purposely. Someone stopped
me, and they caused me to spill the tray. At the

84 Louis Cabiale and Andrew Donizello

(Testimony of Attilio Porcellini.)
time there were about 150 people in the restaurant.
Three or four officers seized me. I did not have
any wine on that tray, as testified to by Agent Jor-
dan. [60]

On cross-examination, the said witness testified :
My position that night was that of a waiter.
When beverages of any kind were served I collected
and brought it to the cash register. It goes into
the till of the proprietors. When I came in wifh
the tray nobody spoke to me; they got hold of me
and grabbed me and took me away. I don't know
Mr. Jordan, but three or four of them grabbed me
all at once. I had the tray in this fashion, and
they came in, three or four, and one got hold of me
by the arm and he said, "You are under arrest, ff
and by doing that the tray upset and the glasses
fell. I have never been arrested before, this is the
first time.

Testimony of Guido Battaglia, for Defendants.

GUIDO BATTAGLIA, called as a witness on
behalf of the defendants, and having been first duly
sworn, testified:

I am assistant cashier in the Banca Popolare
Fugazi. I have known the defendant Cabiale for
about five years. I always know him for a good
man, good morality, an honest man. I know Mr.
Donizello and Mr. Gabalio and the defendant Fora-
siepi. I know all of them as good men, honest at
all times; I never heard anything against them.

vs. The United States of America. 85

(Testimony of Ghiido Battaglia.)
On cross-examination, the said witness testified:
I heard about them a month ago, when they were
arrested in the case, but before that I never heard
anything against them. I never heard anything
against their reputation. They keep a commercial
account at my bank. I have been to the Gianduja
Restaurant several times. Sometimes I go over
there for lunch and sometimes for supper. Every-
body in San Francisco wTho knows Cabiale has noth-
ing to say against him.

Testimony of Alberto Cesana, for Defendants.

ALBERTO CESANA, called as a witness on be-
half of the defendants, testified:

I am a newspaper correspondent for the " Italia
La Voce," an Italian newspaper. I know Cabiale,
Donizello, Gabalio, Zurich and the rest of them.
I know their general reputation for truth, honesty
and integrity ; from all I know they all have a good
reputation, [61]

On cross-examination, the said witness testified:
I never heard of their being arrested for viola-
tions of the National Prohibition Act. I go to
the Gianduja Restaurant often, about every night.
The word " Gianduja" means a mask. In Italy
every province is represented by a figure.

Testimony of E. M. Ratto, for Defendants.

E. M. RATTO, called as a witness on behalf of
the defendants, and having been first duly sworn,
testified :

I am fifty years of age and am by profession an

86 Louis Cabiale and Andrew Donizello

(Testimony of E. M. Ratto.)

interpreter. I know all of the defendants with the
exception of Zurich and know their general repu-
tation for truth, honesty and integrity. That repu-
tation is good.

On cross-examination, the said witness testified:

I have sometimes visited the Gianduja Restau-
rant in the daytime for lunch; never in the evening
because I never go to a cabaret.

THEREUPON counsel for the defendants re-
newed the motion previously made for the intro-
duction in evidence of the tags of July 22d and 23d
and upon this motion the following proceedings
were had.

Mr. TRAMUTOLO.— If your Honor please, that
practically concludes the case so far as the defend-
ants are concerned; I still would like to renew my
motion for the introduction of certain tags of July
22d and 23d, upon this theory, that if liquor was
sold promiscuously on that day there would be en-
tries on these tags; these tags, as I stated to you
this morning, must be kept, by reason of the fact
that the Government is entitled to a tax, and hav-
ing the Government's receipt, there can be no in-
accuracy upon the tags for the entire month. Now,
if the theory of the Government is that liquor was
promiscuously sold, every one of these tags would
have to be changed in the meantime.

The COURT.— Not at all. Let us assume, I do
not say this except as an assumption, that the con-
tents of that pitcher was wine. Now, if somebody
orders the wine, and they go to the pitcher and

vs. The United States of America. 87

bring it out. I suppose on the tags it would ap-
pear as grape juice. Other men order cocktails,
and on the tags it would appear as cocktails. You
cannot tell from the tags what the alcoholic con-
tent of the article is. You are undertaking to
show by the fact [62] that these things were not
registered there is no violation of the law. This
is simply encumbering the record without proving
anything.

Mr. TRAMUTOLO.— The point I want to make
is, why should they be permitted to take isolated
tags and we not be able to produce all of the tags?

The COURT.— They have produced tags that
show the sale of liquor, and to counteract that you
want to offer these tags that on their face do not
show the sale of liquor.

Mr. TRAMUTOLO.— In other words, I want to
introduce all the tags for those two days.

The COURT.— The motion will be denied.

Mr. TRAMUTOLO.— To which we reserve an ex-
ception.

Testimony of George R. Poultney, for the Govern-
ment (Recalled in Rebuttal.)
GEORGE R. POULTNEY, recalled for the
United States in rebuttal, testified:
, Neither I nor anyone that was with me took any
alcoholic liquor into the Gianduja Restaurant
either on the 22d or 23d of July. Whatever liquor
I secured there was secured from the inside, under
my orders, as I have previously testified.

88 Louis Cabiale and Andrew Bonizello

Testimony of W. Smith, for the Government
(Recalled in Rebuttal).

W. SMITH, recalled for the United States in
rebuttal, testified:

At the time I apprehended the defendant Fora-
siepi there was just one glass that was about a
quarter full of wine.

On cross-examination, the said witness testified:
I smelled it, put it on my hand and put it to my
lips. Forasiepi came thru the door into the bar
where I was. He had a glass in his hand, just a
glass. I put it with the other on the drainboard
behind the bar and we left it there. I did not
see it poured into any one of these bottles which
have been produced here as exhibits. (To the
Court: I testified that I jumped over the counter
and found the pitcher of wine.) I did not testify
that I poured the contents of that pitcher into any
bottle. I do not know who did. I was not there
at all times, as I said before. I left and ran after
a man who was running through a door, and failed
to overtake him. [63]

Testimony of H. C. Drew, for the Government
(Recalled in Rebuttal).

H. C. DREW, recalled for the United States in
rebuttal, testified:

I know what Maraschino is. I handled it some
eleven or twelve years ago. It is used for bever-
age purposes.

vs. The United States of America. 80

(Testimony of H. C. Drew.)

On cross-examination, the said witness testified:
I know what sabajon is. I have always been
given to understand that sherry was the liquor used
for flavoring. I know that maraschino is a bev-
erage, or a cordial, and has been used as such in
cabarets and saloons for years.

Testimony of W. J. Jordan, for the Government
(Recalled in Rebuttal).

W. J. JORDAN, recalled for the United States in
rebuttal, testified: I wras all alone at the time the
liquor on the tray was upset. Prior to the time of
the upsetting of the liquor I did not place my hand
upon a waiter at all. I asked him what he had
there, and he wanted to know7 who I was, and
I showed him my badge, and said I wTas a revenue
officer, and he took it and threw it up in the air
and said it wras grape juice. There was not any
other kind of liquor in any of these glasses except
what I have termed to be wine. There might be six
glasses at the most, and they all contained red
liquor in them; there was no beer, or lemonade, or
anything at all.

THEREUPON both sides rested.

THEREUPON the said cause was argued by
counsel, and the Court delivered its charge to the
jury, as follows, to wit:

" Gentlemen, this is the first case that we have
tried together; as you will be here for the term, it
will probably not be the last. So, aside from the
merits of this particular case, there are a few gen-

1)0 Louis Cabiale and Andrew Donizello

eral considerations that I would like to bring to the
minds of the jury. The first is, of course, that the
jury are the sole judges of the facts. With the
province of the jury in that regard the Court is
not disposed to interfere.

The next proposition is that the duty of the Court
is to see that the facts are placed before the jury
in accordance with the law, and to state to them
the legal principles involved, which the jury will
themselves apply to the facts as they find them
to be.

We have here a number of defendants charged
with a violation of the National Prohibition Law.
Now, I need not say to you that whatever the senti-
ment [64] is for or against the enforcement of
this Prohibition Law, that is a matter with which
you and I are not concerned. Your duty, equally
wTith mine, under your oaths, and my oath, is to
administer the law as we find it, whether we agree
with the principle or purpose of it, or not. We
have in this court, awaiting trial some 200 or 300
defendants charged under this law. Whether these
men are guilty or innocent will be determined by
each jury as the facts are presented to them. The
acquittal of a man who is guilty of any charge
simply encourages other men to go out and commit
a similar offense. No law can be enforced without
the assistance of the jury, who have the final say
in all criminal cases. Now, if juries are going to
acquit men who are guilty, the result will be that
we will never get through. Unfortunately, this is
the only court in this District, extending from the

vs. The United States of America. [)"!

county of Monterey to the Oregon line, and from
the Pacific Ocean to Nevada, upon which the en-
forcement of this law falls, and without the assist-
ance of the jury we cannot enforce it at all. I say
this not to influence you in passing upon this case,
or any subsequent one, but to impress upon your
minds that in dealing with these matters you are
dealing with a very important subject. We are
dealing with a law that has been adopted by a
majority, we must abide by it and attempt to en-
force it until such time, if that time ever comes y
that the law7 may be changed. It is also true that
men wrho violate this law do it because they make
money out of it. There is no question of any prin-
ciple involved in so far as they are concerned.
When they violate the law, they violate it because
they can make money by so doing. Now7, I think
this court has been quite vigilant in protecting the
rights of citizens and individuals from the some-
times over-zealous acts of officers in the enforce-
ment of this law, but the Court will be equally
vigilant in upholding the officers in acts where they
are acting within the law. There can be no ques-
tion of the legality of the actions of the officers in
the present case.

Now, that brings us to a consideration of the case
itself. The defendants here are charged in a num-
ber of counts with a violation of this law.

The first count charges that they, upon the 22d of
July, 1920, did maintain a common nuisance at
1549 Stockton Street, in the Gianduja hotel, restau-
rant, cafe and bar, in that they kept on hand there

1)2 Louis Cabialc and Andrew Donizello

unlawfully certain intoxicating liquar, [65] to
wit, claret wine, containing one-half of 1 per cent
or more of alcohol by volume and which was then
fit for beverage purposes.

The second count charges a violation of the pro-
visions of the act in that they had unlawfully in
their possession at that same time and place certain
claret wine.

The third count charges a violation of another
provision of the act, in that at the same time and
place they sold certain intoxicating liquor, to wit,
claret wine.

The fourth count also charges at the same time
and place a violation of the act in the sale of claret
wine.

The fifth count also charges a violation of the act
in the sale of intoxicating liquor, to wit, claret wine.

The sixth count charges also a violation of the
act in the sale of intoxicating liquor, to wit, claret
wine.

Now, the seventh count charges that on the 23d
day of July, or the following day, at the same time
and place, there was maintained a nuisance by keep-
ing on the premises claret wine, jackass brandy,
vermouth and maraschino, containing one-half of 1
per cent or more of alcohol by volume, and that the
keeping of the liquor there on the place was un-
lawful.

The eighth count charges that they did unlaw-
fully keep at the same time and place the same
articles, claret wine, jackass brandy, vermouth and
maraschino.

vs. The United States of America. 93

The ninth count charges that on the 23d day of
July, at the same place, they unlawfully, wilfully
and knowingly furnished to George Poultney and
C. W. Herbert certain intoxicating liquor, to wit,
claret wine.

The tenth count charges that they furnished to
Poultney and Herbert certain intoxicating liquors,
to wit, cocktails.

The eleventh count charges on the same day the
sale of certain intoxicating liquor, wThiskey. Now,
I do not recall any evidence introduced as to the
sale of whiskey upon that occasion, so that the
eleventh count will be withdrawn from your con-
sideration. [66]

Now, bearing upon these various charges w7e have
certain provisions of the Prohibition Act, which I
will call to your attention.

"The word ' liquor' or the phrase ' intoxicating
liquor' shall be construed to include alcohol, brandy,
whiskey, rum, gin, beer, ale, porter, and wine and in
addition thereto any spirituous, vinous, malt, or fer-
mented liquor, liquids, and compounds, whether
medicated, proprietary, patented, or not, and by
whatever name called, containing one-half of 1
per cent or more of alcohol by volume which are
fit for use for beverage purposes."

Section 21 provides that: "Any room, house,
building, boat, vehicle, structure, or place where
intoxicating liquor is manufactured, sold, kept, or
hartered in violation of this title, and all intoxicat-
ing liquor and property kept and used in main-
taining the same, is hereby declared to be a com-

94 Louis Cahialr and Andrew Donizello

mon nuisance, and any person who maintains such
a common nuisance shall be guilty of a misde-
meanor, and upon conviction" shall be punished as
therein provided.

Section 33 provides:

" After February 1, 1920, the possession of
liquors by any person not legally permitted under
this title to possess liquor shall be prima facie
evidence that such liquor is kept for the purpose of
being sold, bartered, exchanged, given away, fur-
nished, or otherwise disposed of in violation of the
provisions of this title. Every person legally per-
mitted under this title to have liquor shall report
to the commissioner within ten days after the date
when the eighteenth amendment of the Constitution
of the United States goes into effect, the kind and
amount of intoxicating liquors in his possession."

Section 3 provides:

"No person shall on or after the date when the
eighteenth amendment to the Constitution of the
United States goes into effect" — that was in Jan-
uary of the present year — "manufacture, sell,
barter, transport, import, export, deliver, furnish
or possess any intoxicating liquor except as author-
ized in this act, and all the provisions of this act
shall be liberally construed to the end that the use
of intoxicating liquor as a beverage may be pre-
vented." [67]

A sale, of course, is the transfer of personal prop-
erty or title to personal property from one to an-
other for a consideration, and, of course, the validity
of that sale does not depend upon payment by the

vs. The United States of America. 95

purchaser immediately, or at any time, if the title is
transferred at the time, he is entitled to collect at
that time, or later, as he may be able to do. I make
this suggestion in response to a suggestion of counsel
that these liquors, if sold, were never paid for. That
is, of course, immaterial. If they were delivered for
a price, they were sold at the time, and it is not a
•question of the parties refusing to pay for them.
Nor is it any defense to an action to say that the
vermouth, for instance, that was found there, and
which the chemist says contains 2.55 per cent, was
purchased from somebody with the understanding
that it contained a less per cent. The contents must
be determined, not from the label, but by the con-
tents themselves. Every man who is dealing with
liquor of any kind, therefore, is bound upon his own
responsibility to keep within the law. If it is found
in his possession at an unlawful time or an unlawful
place, he cannot say that he did not know that it con-
tained one-half of 1 per cent or more of alcohol. It
is his duty to know what it contains, otherwise, he
violates the law.

It has also been suggested that maraschino is used
for flavoring and cooking. That may be true, but
the question here is not what it was used for, but
whether it wras fit for beverage purposes. The lan-
guage of the act is "any spirituous, vinous, malt or
fermented liquor, liquids and compounds, containing
one-half of 1 per centum or more of alcohol by vol-
ume, which are fit for use for beverage purposes."
If this maraschino wTas fit for use for beverage pur-
poses and it was there in the bar room, not having

D6 Louis Cabiale and Andrew Donizello

been reported, or not having been authorized to be
kept there by the revenue officers, of course, it was
there unlawfully, even though it might have been
used for cooking purposes.

Speaking, now, from the side of the testimony
presented by the Government, wre have the presence
in that establishment at that time of whiskeyr
brandy, w7ine, vermouth, maraschino and cocktails.
Now, these liquors, if found there, as testified to by
the officers and containing the contents that have
been specified were there unlawfully. There is no
authority for keeping them there, and the [68]
burden is upon the party who has them there, as the
statute says, to show that they were there lawfully.
The question, therefore, for the jury to determine,
is whether these liquors were there at that time, andr
if so, who wras responsible for their presence.

We have here eight defendants charged. Cabiale
and Donizello are the proprietors. Gabalio is a floor
walker, who seats the people. Bertolotti, I thinkr
wras the man who was designated as the bartender.
The rest, I think are waiters. Now, there is this
provision of the criminal law, which is as follows:

"Whoever directly commits any act constituting
an offense defined in any law of the United States,
or aids, abets, counsels, commands, induces or pro-
cures its commission, is a principal. ' '

So that we have this situation: If the jury do find
that the law wras being violated there, if the two pro-
prietors and the others who were employed there
were aiding, and inducing, and encouraging one an-

vs. The United States of America, 97

other in the violation of the law, they are all equally
guilty.

It is for the jury to determine whether any of
these defendants are guilty. If so, which of them,
and how many. In passing upon that question you
will bear in mind the testimony presented both by
the Government and by the defendants, and also this
provision of the law that makes every one a principal
who aids, abets, counsels, commands, induces or pro-
cures the commission of any offense against the law7.

The defendants in this case, as in any case upon
trial in this court for a criminal offense are pre-
sumed to be innocent, and that assumption attaches
at the commencement of the trial and remains wTith
them until the jury have determined otherwise by
their verdict, if they so determine. The jury should
not so determine unless they are satisfied by the evi-
dence of the guilt of the defendants beyond a rea-
sonable doubt.

A reasonable doubt is not every capricious or ima-
ginary doubt that may arise out of sympathy of the
jurors. It is such a doubt as a reasonable man may
honestly entertain upon a full consideration of all the
evidence. It is defined in law7 [69] to be that
state of the case which, after an entire comparison
and consideration of all the evidence, leaves the
minds of the jurors in that condition that they can
not say that they have an abiding conviction to a
moral certainty of the truth of the charge. If you
have such a reasonable doubt as to the guilt of these
defendants, or any of them, it is your duty to give to
such defendant the benefit of that doubt and acquit

98 Louis Cabiale and Andrew Donizello

him. If you have no such reasonable doubt, it is
equally your duty to convict him.

Evidence has been introduced here tending to show
that the reputation of these defendants, or some of
them, for truth, honesty and integrity is good. That
evidence you will consider with all the other evidence
in this case, and if after a consideration of all the
evidence, including that of good reputation, you have
any reasonable doubt of the guilt of such defendant,
you will, as I say, give him the benefit of that doubt
and acquit him. On the other hand, if, after a con-
sideration of all of the evidence, including that of
good reputation, you have no reasonable doubt of his
guilt, it is equally your duty to convict him notwith-
standing such good reputation.

Now, you may return, if the evidence satisfies you
as to the guilt of all of the defendants upon all the
counts, a general verdict of guilty ; that is, a convic-
tion of all the defendants upon all the counts. If,
on the other hand, you have a reasonable doubt as to
the guilt of all the defendants upon all the counts,
you may return a general verdict of not guilty ; or,
you can return a verdict finding certain defendants
guilty and others not guilty, as the evidence shall ap-
peal to you, upon the whole case, or upon any count.

You may take the information to the jury room
with you. The clerk has prepared one form of ver-
dict which you may use, or you may prepare your
own verdict. [70]

The defendant requested the Court to give the fol-
lowing instructions:

"You are further instructed that the provisions of

vs. The United States of America. DD

the National Prohibition Act are to be liberally con-
strued to the end that the use of intoxicating liquors
as a beverage can be prevented; therefore, it must be
proven to your satisfaction beyond a reasonable
doubt and to a moral certainty that the liquor or
liquors found on the premises were for the purpose of
being sold as a beverage. (Section 3, Title 2, Act
October 28, 1919).

" You are instructed that where a sale is alleged to
have been made by an employee it must be proven
to your satisfaction beyond a reasonable doubt and
to a moral certainty that a benefit resulted to the em-
ployer by reason of the sale made by an employee;
therefore, before you can convict the defendants at
bar, or any of them, it must be proven to your satis-
faction beyond a reasonable doubt and to a moral cer-
tainty which of the defendants derived the benefits
of the sale or sales alleged to have been made."

The Court refused to give the said requested in-
structions, to which refusal counsel for the defend-
ants duly excepted.

THEREUPON, to wit, on the twenty-first day of
September, 1920, the jury retired and subsequently
returned into court with a verdict finding the de-
fendant Cabaile guilty on counts 2, 3 and 8 of the
information and not guilty on the remaining counts ;
finding the defendant Donizello guilty on counts 2,
3, 8, 9 and 10 of said information and not guilty on
the remaining counts; and finding all of the other
defendants not guilty on all of the counts of the in-
formation.

100 Louis Cabiale and Andrew Donizello

THEREAFTER and on the sixth day of October,
1920, the day fixed for the pronouncement of judg-
ment the defendants Cabiale and Donizello were
called to the bar and asked if they had any legal
cause to show why the judgment of the law and the
sentence of the Court should not be pronounced upon
them.

THEREUPON Chauncey P. Tramutolo, Esq.,
counsel for the said defendants presented to the
Court and filed his motion for a new trial, which
said motion is in the words and figures as follows,
to wit: [71]

(Title of Court and Cause.)

Motion for New Trial.

Now comes the defendants Louis Cabiale and
Andrew Donizello and move the above-entitled court
to set aside and vacate the verdict heretofore ren-
dered herein on the following grounds :

I.
That the said verdict is against the law.

II.
That the said verdict is against the evidence.

III.
That the said verdict is not supported by the evi-
dence.

IV.
That the Court erred in refusing to give the in-
structions requested by the defendants, which in-
structions are as follows:

(a) 'You are further instructed that the provi-

vs. The United States of America. 101

sions of the National Prohibition Act are to be liber-
ally construed to the end that the use of intoxicating
liquors as a beverage can be prevented ; therefore, it
must be proven to your satisfaction beyond a rea-
sonable doubt and to a moral certainty that the
liquor or liquors found on the premises were for the
purpose of being sold as a beverage. (Section 3, Title
2, Act October 28, 1919)/

(b) 'You are instructed that where a sale is al-
leged to have been made by an employee it must be
proven to your satisfaction beyond a reasonable
doubt and to a moral certainty that a benefit resulted
to the employer by reason of the sale made by an
employee; therefore, before you can convict the de-
fendants at bar, or any of them, it must be proven to
your satisfaction beyond a reasonable doubt and to
a moral certainty wrhich of the defendants derived
the benefits of the sale or sales alleged to have been
made. '

Upon newly discovered evidence, wrhich evidence is
hereto attached and made a part of this motion in
the form of an affidavit of S. V. Thomas, and which
evidence defendants could not, with reasonable dili-
gence, discover and produce at the time of trial.

C. F. TRAMUTOLO,

Attorney for Defendants and Plaintiffs in Error.
[72]

With the said motion and in support thereof the
said counsel for said defendants presented and filed
the following affidavit:

102 Louis Cabiale and Andrew Douizello

(Title of Court and Cause.)

Affidavit of S. V. Thomas.

State of California,

City and County of San Francisco, — ss.

S. V. Thomas, being first duly sworn, deposes and
says :

That on and prior to the 23d day of July, 1920, he
was employed by the United States Government as a
prohibition enforcement officer charged with the duty
of suppressing violations of the act of October 28,
1919, more commonly known as "The National Pro-
hibition Act."

That your affiant on the 23d day of July, 1920 be-
tween the hours of 9 :30 and 10 :30 P. M., of said day
in company with other prohibition officers entered
the barroom premises of the Gianduja Hotel and
Restaurant situated at 1549 Stockton Street in the
City and County of San Francisco, State of Cali-
fornia ; that accompanying your affiant were prohibi-
tion enforcement officers R. A. Wolf and W. D.
Smith ; that your affiant personally searched the bar-
room premises of the Gianduja Hotel and Restaurant
and on said premises found a bottle of vermouth and
a bottle of an unknown liquid which affiant after-
ward ascertained to be mareschino; that on the
drainboard of the bar of said premises, affiant found
a pitcher containing an unknown liquid, a part of
which liquid affiant poured into two empty Vichy
Water bottles ; that all of the property found in and
about the barroom premises of said Gianduja Hotel
and Restaurant was found by your affiant; that your

vs. The United States of America. 103

affiant after entering the said premises, at all times
observed W. D. Smith guarding the door leading into
the barroom premises, which said door is situate at
the corner of Stockton and Union Streets, and that
said W. D. Smith remained near said door for the
purpose of preventing people from going out or com-
ing into the barroom premises during the time that
your affiant was searching the barroom premises;
that your affiant was in a position to have seen W. D.
Smith search the barroom premises if the said W. D.
Smith had ever attempted to search the same ,

That in two of the bottles labeled Vichy Water
your affiant poured [73] therein certain liquids
which liquids were brought in from the dining room
of the Gianduja Hotel and Restaurant and that it is
untrue with respect to these two bottles, that the same
were found in or about the barroom premises.

That affiant further states that any and all prop-
erty found by him on the barroom premises of the
Gianduja Hotel and Restaurant were placed by him
in a wTooden box and that said wooden box contain-
ing the liquids so found, was taken to the prohibition
enforcement office in the Appraiser's Building in the
City and County of San Francisco ; that the Govern-
ment, in its information charged the above named
defendants with having had in their possession a
quantity of jackass brandy. With respect to this
jackass brandy, affiant states that the said jackass
brandy was not at any time or at all found in or
about the premises of the Gianduja Hotel and Restau-
rant or barroom premises but that the said jackass
brandy was on the person of your affiant at the time

104 Louis Cabialc and Andrew Donizello

of entering the barroom premises of the Gianduja
Hotel and Restaurant and that affiant had procured
said jackass brandy from another place which affiant
had searched prior to going to the premises of the
the Gianduja Hotel and Restaurant and that affiant
inadvertently placed said jackass brandy amongst
the property alleged to have been found on the prem-
ises of the Gianduja Hotel and Restaurant and
barroom premises; that on one of the trial days of
the above-entitled case, to wit, on September the 22d,
1920, affiant wTas interrogated in the presence of his
wife by Assistant U. S. Attorney A. M. Hardie with
respect to the testimony he would give when called
as a witness for the Government ; that in said inter-
view with Assistant U. S. Attorney A. M. Hardie,
your affiant stated that his testimony would be in sub-
stance as hereinabove stated in this affidavit; that
thereafter Assistant U. S. Attorney A. M. Hardie re-
quested affiant to go to the office of Assistant U. S.
Attorney B. F. Geis in the Postoffice Building, with
which request your affiant complied and in the con-
versation had with the Assistant U. S. Attorney B.
F. Geis, affiant related the same conversation as
affiant had with Assistant U. S. Attorney A. M.
Hardie, which conversation was in substance as
stated in this affidavit and that then and there the
said Assistant U. S. Attorney B. P. Geis told affiant
that he (Geis) would not [74] use affiant as a
witness.

S. V. THOMAS.

vs. The United States of America. 105

Subscribed and sworn to before me this 2d day of
October, 1920.

[Seal] ETTA LAIDLAW,

Notary Public in and for the City and County of
San Francisco, State of California.

AT THE SAME TIME, the said counsel for said
defendants presented and filed his motion in arrest
of judgment, which said motion is in words and fig-
ures as follows, to wit :

(Title of Court and Cause.)

Motion in Arrest of Judgment.

Now7 comes the defendants Louis Cabiale and
Andrew Donizello and each of them and move to ar-
rest the judgment herein upon the following grounds,
to wit:

That the said information fails to state an offense
against the laws of the United States of America.

II.

That the said information fails to state an offense
against the laws of the United States in this ; that it
appears upon the face of said information that this
Court has no jurisdiction of the offense which these
defendants and each of them are charged with hav-
ing committed.

III.

That there is no authority in lawT for the filing of
information for the violation of the law which the de-
fendants and each of them are charged with having
violated.

106 Louis Cabiale and Andrew Donizello

Dated: This 6th day of October, 1920.

C. F. TRAMUTOLO,
Attorney for Defendants and Plaintiffs in Error.
[75]

THEREUPON, the motions for new trial and in
arrest of judgment were argued by counsel, in con-
sideration whereof, it was ordered by the Court that
said motions and each of them be denied, to which
rulings of the Court, counsel for the said defend-
ants, then and there duly excepted. And the Court
thereupon passed sentence upon the said defendants
as appears from the judgment of record herein.

And now and within due and legal time thereafter,
the said defendants Louis Cabiale and Andrew Doni-
zello, present this their Bill of Exceptions to be used
upon the prosecution of the writ of error in this
cause and pray that the same be settled, approved
and allowed.

Dated: This day of October, 1920.

CHAUNCEY P. TRAMUTOLO,
Attorney for said Defendants.
It is hereby stipulated that the foregoing bill of
exceptions is in all respects full, true and correct and
as such may be settled by the trial judge, and that
same shall be and constitute the bill of exceptions in
said cause.

PRANK M. SILVA,
United States Attorney.
By ALBERT M. HARDIE,
Assistant United States Attorney.
To the end that the matters and things therein con-
tained may be and remain of record, the foregoing

vs. The United States of America. 107

bill of exceptions is hereby settled, approved and al-
lowed as being in all respects full, true and correct.

M. T. DOOLING,
District Judge.

[Endorsed]: Rec'd a copy of the within bill of
exceptions this 1st day of November, 1920.

PRANK M. SILVA,

U. S. Attorney.
ALBERT M. HARDIE,
Asst. U. S. Attorney.

Filed Apr. 6, 1921. W. B. Maling, Clerk. By
Lyle S. Morris, Deputy Clerk. [76]

In the District Court of the United States for the
Northern Division of the Northern District of
California.

No. 8602.

THE UNITED STATES OF AMERICA

vs.

LOUIS CABIALE et al.

Verdict.

We, the Jury find as to the defendants at the bar,
as follows :

Louis Cabiale, Guilty on Counts 2, 3, 8. Not Guilty
on Counts 1, 4, 5, 6, 7.

Andrew Donizello, Guilty on Counts 2, B, 8, 9, 10.
Not Guilty on Counts 1, 4, 5, 6, 7.

P. Cavello, Head Waiter, Not Guilty on all Counts.

108 Louis Cabiale and Andrew Bonizello

G. Bertolotti, Bartender, Not Guilty on all Counts.
Peter Zurich, Not Guilty on all Counts.
Attilio Parcelling Not Guilty on all Counts.
Dante Forasiepi, Not Guilty on all Counts.
Frank Coppola, Not Guilty on all Counts.

WM. R. PENTZ,

Foreman.

[Endorsed]: Filed Sep. 22, 1920, at 6:20 o'clock
P. M. W. B. Maling, Clerk. By Lyle S. Morris,
Deputy Clerk. [77]

In the Southern Division of the United States Dis-
trict Court, Northern District of California,
First Division.

No. 8602.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

LOUIS CABIALE et al.,

Defendants.

Motion for New Trial.

Now comes the defendants Louis Cabiale and
Andrew Donizello and move the above-entitled Court
to set aside and vacate the verdict heretofore ren-
dered herein, on the following grounds :

I.
That the said verdict is against the law.

II.
That the said verdict is against the evidence.

vs. The United States of America. 109

III.

That the said verdict is not supported by the evi-
dence.

IV.

That the Court erred in refusing to give the in-
structions requested by the defendants, which in-
structions are as follows :

(a) "You are further instructed that the pro-
visions of the National Prohibition Act are to be liber-
ally construed to the end that the use of intoxicating
liquors as a beverage can be prevented ; therefore, it
must be proven to your satisfaction beyond a reason-
able doubt and to a moral certainty that the liquor or
liquors found on the premises were for the purpose
of being sold as a beverage. (Section 3, Title 2, Act
October 28, 1919." [78]

(b) "You are instructed that where a sale is
alleged to have been made by an employee it must
be proven to your satisfaction beyond a reasonable
doubt and to a moral certainty that a benefit re-
sulted to the employer by reason of the sale made
by an employee; therefore, before you can convict
the defendants at bar, or any of them, it must be
proven to your satisfaction beyond a reasonable
doubt and to a moral certainty which of the de-
fendants derived the benefits of the sale or sales
alleged to have been made."

Upon newly discovered evidence, which evidence

is hereto attached and made a part of this motion

in the form of an affidavit of S. V. Thomas, and

which evidence defendants could not, with reason-

110 Louis Cabiale and Andrew Donizello

able diligence, discover and produce at the time of

trial.

C. F. TRAMUTOLO,

Attorney for Defendants and Plaintiffs in Error.

[79]

In the Southern Division of the United States Dis-
trict Court, Northern District of California,
First Division.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

LOUIS CABIALE et al.,

Defendants.

Affidavit of S. V. Thomas.

State of California,

City and County of San Francisco, — ss.

S. V. Thomas, being first duly sworn, deposes and
says:

That on and prior to the 23d day of July, 1920,
he was employed by the United States Government
as a prohibition enforcement officer charged with
the duty of suppressing violations of the Act of
October 28, 1919, more commonly known as "The
National Prohibition Act."

That your affiant on the 23d day of July, 1920,
between the hours of 9:30 and 10:30 P. M. of said
day in company with other prohibition officers
entered the barroom premises of the Gianduja
Hotel and Restaurant situated at 1549 Stockton

vs. The United States of America. 111

Street, in the city and county of San Francisco,
State of California; that accompanying your affi-
ant were* prohibition enforcement officers R. A.

Wolf and W. D. Smith; that your affiant person-
ally searched the barroom premises of the Gianduja
Hotel and Eestaurant and on said premises found
a bottle of vermouth and a bottle of an unknown
liquid which affiant afterwTards ascertained to be
mareschino; that on the drainboard of the bar of
said premises, affiant found a pitcher containing
an unknowTn liquid, a part of which liquid affiant
poured into two empty Vichy Water bottles; that
all of the property found in and [80] about the
barroom premises of said Gianduja Hotel and
Restaurant was found by your affiant; that your
affiant after entering the said premises, at all times
observed W. D. Smith guarding the door leading
into the barroom premises, which said door is
situate at the corner of Stockton and Union Streets,
and that said W. D. Smith remained near said door
for the purpose of preventing people from going
out or coming into the barroom premises during the
time that your affiant was searching the barroom
premises; that your affiant was in a position to
have seen W. D. Smith search the barroom prem-
ises if the said W. D. Smith had ever attempted
to search the same.

That in twTo of the bottles labeled Vichy Water
your affiant poured therein certain liquids which
liquids were brought in from the dining room of the
Gianduja Hotel and Restaurant and that it is
untrue with respect to these two bottles, that the

112 Louis Cabiale and Andrew Donizello

same were found in or about the barroom premises.
That affiant further states that any and all prop-
erty found by him on the barroom premises of the
Gianduja Hotel and Restaurant were placed by him
in a wooden box and that said wooden box con-
taining the liquids so found, was taken to the pro-
hibition enforcement office in the Appraiser's Build-
ing in the city and county of San Francisco; that
the Government, in its information charged the
above named defendants with having had in their
possession a quantity of jackass brandy. With re-
spect to this jackass brandy, affiant states that the
said jackass brandy was not at any time or at all
found in or about the premises of the Gianduja
Hotel and Restaurant or barroom premises, but
that the said jackass brandy was on the person of
your affiant at the time of entering the barroom
premises of the Gianduja Hotel and Restaurant
and that affiant had procured said jackass brandy
from another place which affiant had [81]
searched prior to going to the premises of the
Gianduja Hotel and Restaurant and that affiant
inadvertently placed said jackass brandy amongst
the property alleged to have been found on the
premises of the Gianduja Hotel and Restaurant and
barroom premises; that on one of the trial days of
the above-entitled case, to wit, on September the
22d, 1920, affiant was interrogated in the presence
of his wife by Assistant U. S. Attorney A. M.
Hardy, with respect to the testimony he would give
when called as a witness for the Government; that
in said interview with Assistant U. S. Attorney

vs. The United States of America. 113

A. M. Hardy, your affiant stated that his testimony
would be in substance as hereinabove stated in this
affidavit; that thereafter Assistant U. S. Attorney
A. M. Hardy requested affiant to go to the office
of Assistant U. S. Attorney B. F. Geis, in the Post
Office Building, with which request your affiant
complied and in the conversation had with the As-
sistant U. S. Attorney B. F. Geis, affiant re-
lated the same conversation as affiant had with As-
sistant U. S. Attorney A. M. Hardy, which conver-
sation was in substance as stated in this affidavit
and that then and there the said Assistant U. S.
Attorney B. F. Geis told affiant that he (Geis) would
not use affiant as a witness.

S. V. THOMAS,

Subscribed and sworn to before me this 2d day of
October, 1920.

[Seal] ETTA LAIDLAW,

Notary Public in and for the City and County of
San Francisco, State of California.

[Endorsed] : Filed Oct. 2, 1920. W. B. Maling,
Clerk. By 0. W. Calbreath, Deputy Clerk. [82]

114 Louis Calnalc and Andrew Donizello

In the Southern Division of the United States Dis-
trict Court, Northern District of California,
First Division.

No. (8602).

UNITED STATES OF AMERICA,

Plaintiff,
vs.

LOUIS CABIALE et al.,

Defendants.

Motion in Arrest of Judgment.

Now comes the defendants Louis Cabiale and
Andrew Donizello, and each of them and move to
arrest the judgment herein upon the following
grounds, to wit:

That the said information fails to state an offense
against the laws of the United States of America.

II.

III.

That there is no authority in law for the filing
of informations for the violation of the law which
the defendants and each of them are charged with
having violated.

vs. The United States of America. 115

Dated : This second day of October, 1920.

C. F. TRAMUTOLO,
Attorney for Defendants and Plaintiffs in
Error.

[Endorsed] : Filed Oct. 2, 1920. W. B. Maling,
Clerk. By C. W. Calbreath, Deputy Clerk. [83]

At a stated term of the District Court of the United
States of America, for the Northern District
of California, First Division, held at the court-
room thereof, in the city and county of San
Francisco, on Saturday, the 2d day of October,
in the year of our Lord, one thousand nine
hundred and twenty. Present, the Honorable
MAURICE T. DOOLING, Judge.

No. 8602.

UNITED STATES OF AMERICA
vs.

LOUIS CABIALE and ANDREW DONIZELLO.

Minutes of Court — October 2, 1920 —Judgment.

This case came on regularly this day for pro-
nouncing of judgment upon said defendants, who
were present in Court with attorney, C. F. Tram-
utolo, Esq. B. F. Geis, Esq., Asst. U. S. Atty.,
was present on behalf of the United States. Said
defendants were then called for judgment. Mr.
Tramutolo moved the Court for a new trial, which
motion the Court ordered denied, and to wThich
order exception was entered. Mr. Tramutolo moved
the Court in arrest of judgment, which motion the

116 Louis Cabiale and Andrew Donizello

Court ordered denied, and to which order excep-
tion was entered. Said defendants were then called
for judgment. E. Partici and E. Perasso were
duly sworn and examined on behalf of the United
States. After hearing Mr. Tramutolo, and no cause
appearing why judgment should not be pronounced
herein against said defendants, the Court ordered
that each of said defendants, for the offense of
which he stands convicted, herein, be imprisoned
for the period of six (6) months in the county jail,
city and county of San Francisco, State of Cali-
fornia, that said defendants stand committed to the
custody of the U. S. Marshal to execute said judg-
ments, and that commitments issue accordingly.
Further ordered that execution of said judgments
be stayed until October 6, 1920, and in event of
appeal, said defendants' bonds for appearance here-
in be [84] fixed in the sum of $5,000.00 each,
and that said defendants have until October 6, 1920,
to give and file such bonds. [85]

In the Southern Division of the United States Dis-
trict Court for the Northern District of Cali-
fornia, First Division.

No. 8602.

THE UNITED STATES OF AMERICA

vs.

LOUIS CABIALE and ANDREW DONIZELLO,

vs. The raited States of America. 117

Judgment on Verdict of Guilty.
Convicted Viol. National Prohibition Act.

Ben F. Geis, Esq., Assistant United States At-
torney, and the defendants with their counsel came
into court. The defendants were duly informed by
the Court of the nature of the information filed on
the 29th day of July, 1920, charging them with the
crime of violating the National Prohibition Act, of
their arraignment and plea of not guilty; of their
trial and the verdict of the Jury on the 22d day of
September, 1920, to wit:

"We, the Jury, find as to the defendants at the
bar, as follows: Louis Cabiale, Guilty on Counts
2, 3, 8. Not Guilty on Counts 1, 4, 5, 6, 7 ; AndrewT
Donizello, Guilty on Counts, 2, 3, 8, 9, 10; Not
Guilty on Counts 1, 4, 5, 6, 7. * * *

"WM. R. PENTZ,

" Foreman. "

The defendants were then asked if they had any
legal cause to show why judgment should not be
entered herein and no sufficient cause being shown
or appearing to the Court, and the Court having
denied a motion for new trial and a motion in
arrest of judgment; thereupon the Court rendered
its judgment; THAT, WHEREAS, the said Louis
Cabiale and Andrew Donizello having been duly
convicted in this Court of the crime of Violating the
National Prohibition Act;

IT IS THEREFORE ORDERED AND AD-
JUDGED that the said Louis Cabiale and Andrew'
Donizello each be imprisoned for the period of six

118 Louis Cabiale and Andrew Donizello

(6) months in the County Jail, County of San
Francisco, State of California. [86]

Judgment entered this 2d day of October, A. D.
1920.

WALTER B. MALING,

Clerk.
By C. W. Calbreath,
Deputy Clerk. [87]

In the Southern Division of the United States Dis-
trict Court for the Northern District of Cali-
fornia, First Division.

No. 8602.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

LOUIS CABIALE et al.,

Defendants.

Petition for Writ of Error.
Now come the defendants Louis Cabiale and
Andrew Donizello and say that in the verdict and
judgment heretofore rendered against them and
each of them in the above-entitled cause and in the
sentence of the Court pronounced against them and
each of them on the second day of October, 1920,
manifest error hath happened to the grievious dam-
age of these defendants and of each of them, as by
their assignment of errors filed herewith more
fully appears, and that said defendants and each of

vs. The United States of America. 119

them are aggrieved by the said verdict, judgment
and sentence,

WHEREFORE said defendants pray that a writ
of error issue in their behalf to the United States
Circuit Court of Appeals for the Ninth Circuit, to
correct the said error, and that a full, true and com-
plete transcript of the record and proceedings in
this cause, duly authenticated, be sent to said
United States Circuit Court of Appeals.

Dated: this 6th day of October, 1920.

C. F. TRAMUTOLO,
Attorney for said Defendants.

[Endorsed] : Due service and receipt of a copy
of the within Petition for Writ of Error is hereby
acknowledged this 6th day of October, 1920.

FRANK M. SILVA,
Attorney for Pl'ff.

Filed Oct. 6, 1920. W. B. Maling, Clerk. By
C. W. Calbreath, Deputy Clerk. [88]

In the Southern Division of the United States Dis-
trict Court for the Northern District of Cali-
fornia, First Division.

No. 8602.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

LOUIS CABIALE et al.,

Defendants.

120 Louis Cabiale and Andrew Donizello

Assignment of Errors.

Now come Louis Cabiale and Andrew Donizello,
defendants in the above-entitled cause and file the
following assignment of errors upon which they and
each of them will rely for the prosecution of the
writ of error in the above-entitled cause, petition
for wThich writ of error is filed at the same time as
this Assignment of Errors;

That said District Court erred in denying the
motion of these defendants for a new trial.

II.

That said Court erred in denying the motion of
said defendants in arrest of judgment.

III.

That said District Court had no jurisdiction to
try the said cause, or to hear or to determine the
same or to pronounce any judgment or sentence
therein against these defendants or against any of
them.

IV.

That each and every count of the information in
the above-entitled cause upon which these defend-
ants or both or either of them were convicted fails
to state facts sufficient to constitute any crime or
offense against the United States, in this, to wit:
189]

1. That count two of the said information, upon
wThich count both of these defendants were con-
victed, does not state any crime or public offense
against the United States, for that it is not alleged

vs. The United States of America. 121

in said count that the possession of the liquor
therein referred to was illegal or unlawful upon the
part of these defendants, or either of them, or that
said liquor was possessed or used or intended by
said defendants or either of them, for any illegal
purpose.

2. That the third count of said information
upon which count both of these defendants were
convicted does not state any offense against the
United States, in this, to wit, that said count con-
tains no particulars of any offense or of any alleged
sale of intoxicating liquor, and said count does not
state that the sale of liquor therein referred to wTas
for beverage purposes or for any illegal or unlaw-
ful purpose, or that either of these defendants was
not authorized by law to make such sale.

3. That the eighth count of said information
upon which count both of these defendants were
convicted, does not state any crime or offense
against the United States in that there are no facts
stated in said count to show that the alleged pos-
session by these defendants of the intoxicating
liquor therein referred to was unlawful or illegal.

4. That the ninth count of said information,
upon which count the defendant Andrew Donizello
was convicted, does not charge said defendant with
any crime against the United States in this, to wit,
that said count does not state any facts to show
that the furnishing of the intoxicating liquor there-
in referred to by said defendant was unlawful or
illegal.

5. That the tenth count of said information,

122 Louis Cabialc and Andrew Bonizello

upon which count the defendant Andrew Donizello
was convicted, does not charge said defendant with
any crime against the United States for the reason
[90] that there are no facts stated in said count
showing or tending to show how or in what manner
the furnishing of the intoxicating liquor, therein
referred to, by said defendant, was illegal or un-
lawful.

That the said District Court erred in refusing to
give to the Jury the following instruction requested
by said defendants:

" Gentlemen of the Jury: You are instructed that
where a sale is alleged to have been made by an
employee it must be proven to your satisfaction be-
yond a reasonable doubt and to a certainty that a
benefit resulted to the employer by reason of the
sale made by an employee; therefore, before you
can convict the defendants at bar, or any of them,
it must be proven to your satisfaction beyond a
reasonable doubt and to a moral certainty, which of
the defendants derived the benefits of the sale or
sales alleged to have been made."

VI.

That the said Court erred in refusing to give to
the jury the following instruction requested by said
defendants :

" Gentlemen of the Jury: You are further in-
structed that the provisions of the National Pro-
hibition Act are to be liberally construed to the
end that the use of intoxicating liquors as to bev-
erage can be prevented; therefore, it must be

vs. The United States of Ameriea. 123

proven to your satisfaction beyond a reasonable
doubt and to a moral certainty that the liquor or
liquors found on the premises were for the pur-
pose of being sold as a beverage. (Section 3, Title
2, Act October 28, 1919)."

VII.

That the Court erred in overruling the objection
made by counsel for the defendants to questions
asked of and testimony given by the witness A. R.
Shurtleff on his direct examination, which said
questions, objections and testimony are in full as
follows, to wit: [91]

"Q. On that evening, Mr. Shurtleff, will you state
to the jury and court whether or not you observed
liquor on the other tables, generally, or promis-
cuously in that place?

A. As we entered the place —

Mr. TRAMUTOLO.— Before that question is
answered, whether or not they observed liquor on
other tables is not the charge that we are required
to meet here. The charge here is a specific charge
of sale on nine counts of claret, and on one count of
cocktails, and one count of whiskey; therefore, the
question of whether there was liquor there on the
premises cannot be binding on these defendants.
Suppose the liquor was brought in, as we will prove,,
by patrons, how can that be binding on the de-
fendants %

The COURT.— That probably will be a matter of
defense. The objection is overruled.

Mr. TRAMUTOLO.— Exception.

Mr. GEIS. — State what you observed.

124 Louis Cabiale and Andrew Donizello

A. As we entered the place, I was surprised at
the amount of colored liquid or liquor that was on
the different tables. As I proceeded in, there were
two couples sitting at a table, two men and two
women, and I told them who I was, what my busi-
ness was there, and proceeded to take the wine off
the table. I gathered up all I could possibly carry
from two tables at a time, and took it back to the
counter, where John Kupser was sitting, and told
him to take care of it. After taking one back, I
went right up to the dining-room and went to the
table where George Poultney and party were sitting.
The wine and the cocktails which they had at this
table they had removed from the top of the table,
and were hiding it underneath. I told them who I
was, and that I wanted what they had in the glasses,
and took the cocktails and the claret away from
them and took it back to Mr. Kupser, and he put
it into this flask. [92]

VIII.

The Court erred in overruling objections made
by counsel for the defendants to the introduction in
evidence of certain checks or tickets taken from
place of business of said defendants, which said
checks or tickets were introduced during the testi-
mony of the witness H. M. Kupser, and the Court
further erred in the comments which it made at the
time of the introduction of said evidence, as fol-
lows, to wit:

Mr. TRAMUTOLO.— If your Honor please, if the
Government proposes now to introduce these checks,
I certainly object to their introduction on the

vs. The raited States of America. 125

ground that there is no means of identifying them.

The COURT.— He says he knows them.

Mr. GEIS. — Q. Are they in the same condition
now that they were when you got them i

A. They are.

Q. With the exception that they are torn apart?

A. Yes.

IX.

The Court erred in admitting in evidence, over
the objection of the defendant, certain bottles of
liquor and in making various comments upon the
same, which said proceedings occurred during the
testimony of the witness E. F. Love, and were as
follows, to wit :

Q. I hand you United States Exhibit No. 4 for
Identification, and ask you if you ever saw that
bottle before, and its contents? A. Yes.

Q. At the time that the bottle was handed to you,
was it sealed? A. It was.

Q. And did you analyze it?

A. I did ; I determined the alcoholic content of it.

Q. What did it analyze? A. 33.1 per cent.

Q. Alcohol? A. Yes.

The COURT.— Q. By volume? A. By volume.

Mr. GEIS. — Q. By the way, who did you receive
that bottle from? A. Prom Mr. Estell. [93]

Q. I show you United States Exhibit 5 for identi-
fication and ask you if you ever saw that bottle be-
fore, and if you analyzed it? A. Yes, I did.

Q. And what was the result ?

A. Alcohol, 2.55 per cent, by volume.

Q. And I hand you a bottle referred to as being

126 Louis Calnale and Andrew Donizello

in the box, and ask you if you have ever seen that
bottle before? A. I have.

Q. Did you also receive that from Mr. Estell ?

A. Yes.

Q. And did you make a chemical analysis of it?

A. I did.

Q. With what result?

A. Alcohol, 17.8 per cent by volume.

Q. And I hand you another one heretofore tes-
tified to, have you seen that bottle before ?

A. Yes.

Q. And did you make a chemical analysis of its
contents? A. Yes.

Q. With what result?

A. Alcohol, 48.6 per cent by volume.

The COURT.— Q. Do you know what liquor it is?

A. I think that one contained whiskey.

Mr. GEIS. — Q. And this one, do you remember
what this one contained ?

A. No, I didn't decide what that was.

Q. But some alcoholic liquor ? A. Yes.

Q. I hand you another bottle, testified as being in
the box, and ask you if that was handed you by
Mr. Estell? A. It was.

Q. And did you make a chemical analysis of that ?

A. Yes, I did.

Q. With what result?

A. Alcohol, 45.25 per cent by volume.

Q. And, in your best judgment, what was it?

A. I think brandy, but I am not sure.

Q. And also another bottle testified to as having
been in the box. Did you ever see that before ?

vs. The United States of America. 127

A. Yes, I did.

Q. And did you make a chemical analysis of that
one? A. Yes.

Q. With what result I A. 45.25 per cent.
[94]

The COURT.— Q. That would be about 90 proof?

A. Yes, sir.

Mr. GEISS.— Q. And what, in your best judg-
ment, was that?

A. I did not decide. I didn't have very much
time to work on it, and I didn't decide.

Mr. GEISS.— We offer them in evidence.

Mr. TRAMUTOLO.— To which we object as im-
material, irrelevant and incompetent, there being
no evidence here —

The COURT.— Who labeled these bottles?

Mr. GEIS. — The labels that are placed on these
bottles were placed by the chemist; Chemist No. 584;
September 20, 1920; Gianduja Cafe; Brandy; al-
coholic content; Officers Poultney and others.
They all contain the same label, your Honor, with
the exception of the content.

Mr. TRAMUTOLO.— The testimony of Mr.
Poultney was that he did not find any of this prop-
erty there, and he didn't see it found.

The COURT. — I don't attach much importance
to that objection, Mr. Tramutolo; he saw it in the
box on the counter in the barroom.

Mr. TRAMUTOLO.— That is just the point, your
Honor; I don't believe that there was any testimony
that Mr. Poultney saw it in the box.

128 Louis Cabiale and Andrew Donizello

The COURT.— Well, I am willing to let it go to
the jury on that proposition.

Mr. TRAMUTOLO. — I reserve an exception.
The labels, as they appear, were signed by Mr.
Poultney.

The COURT.— The objection is overruled.

Mr. TRAMUTOLO.— I reserve an exception.

The Court erred in refusing to admit certain evi-
dence offered by said defendants, as following, to
wit: [95]

Mr. TRAMUTOLO.— If your Honor please, that
practically concludes the case so far as the defend-
ants are concerned; I still would like to renew my
motion for the introduction of certain tags of July
22d and 23d, upon this theory, that if liquor was
sold promiscuously on that day there would be en-
tries on these tags; these tags, as I stated to you
this morning, must be kept, by reason of the fact
that the Government is entitled to a tax, and having
the Government's receipt there can be no inaccuracy
upon the tags for the entire month. Now, if the
theory of the Government is that liquor was promis-
cuously sold, every one of these tags would have to
be changed in the meantime.

The COURT.— Not at all. Let us assume, I do
not say this except as an assumption, that the con-
tents of that pitcher was wine. Now, if somebody
orders the wine, and they go to the pitcher and bring
it out. I suppose on the tags it would appear as
grape juice. Other men order cocktails, and on the
tags it would appear as cocktails. You cannot tell

vs. The United States of America. 12!)

from the tags what the alcoholic content of the
article is. You are undertaking to show by the fact
that these things were not registered there is no
violation of the law. This is simply encumbering
the record without proving anything.

Mr. TRAMUTOLO.— The point I want to make
is, why should they be permitted to take isolated
tags and wTe not be able to produce all of the tags I

The COURT.— They have produced tags that
show the sale of liquor, and to counteract that you
want to offer these tags that on their face do not
show the sale of liquor.

Mr. TRAMUTOLO.— In other words, I want to
introduce all of the tags for those two days.

The COURT.— The motion will be denied.

Mr. TRAMUTOLO. — To which we reserve an ex-
ception. [96]

WHEREFORE, said defendants pray that their
petition for a writ of error be allowed and that the
judgment of the said District Court be reversed.

Dated this 6th day of October, 1920.

C. F. TRAMUTOLO,
Attorney for said Defendants.

[Endorsed] : Due service and receipt of a copy of
the within Assignment of Errors is hereby acknowl-
edged this 6th day of October, 1920.

FRANK M. SILVA,
Attorney for Plaintiff.

Filed Oct. 6, 1920. W. B. Maling, Clerk. By C.
W. Calbreath, Deputy Clerk. [97]

130 Louis Cdbiale arid Andrew Donizello

At a stated term of the District Court of the United
States of America for the Northern District of
California First Division, held at the court-
room thereof, in the city and county of San-
Francisco, on Wednesday, the 6th day of Oc-
tober, in the year of our Lord one thousand nine
hundred and twenty. Present, The Honorable
MAURICE T. DOOLING, Judge.

No. 8602,

UNITED STATES OF AMERICA

vs.

LOUIS CABIALE and ANDREW DONIZELLO.

Minutes of Court— October 6, 1920 —Order Allowing
Writ of Error.

On motion of C. F. Tramutolo, Esq., attorney for
defendants herein, and presenting petition for writ
of error to the United States Circuit Court of Ap-
peals for the Ninth Circuit, from the judgments
heretofore entered herein, the Court ordered that
said appeal be allowed and that pending determina-
tion thereof, said defendants be allowed to be ad-
mitted to bail in the sum of Five Thousand
($5000.00) Dollars each, and that they each have one
day from the date hereof within which time to file
such bond. [98]

vs. The United States of America. 131

In the Southern Division of the United States
District Court, Northern District of California,
First Division.

No. 8602.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

LOUIS CABIALE et al.,

Defendants.

Order Allowing Writ of Error.

Upon the filing of the petition for a writ of error
in the above-entitled cause and GOOD CAUSE AP-
PEARING THEREFOR,

IT IS HEREBY ORDERED that the said peti-
tion for a writ of error be allowed as to said de-
fendants Louis Cabiale and Andrew Donizello, and
each of them, and that the clerk of the above-en-
titled Court be directed and he is hereby directed to
transmit to the clerk of the Circuit Court of Ap-
peals in and for the Ninth Circuit, a full, true and
complete transcript of the record of proceedings in
the above-entitled cause and that during the pen-
dency of said writ of error all proceedings in this
Court be suspended and stayed, and that the said
defendants and each of them be admitted to bail in
the sum of Five Thousand Dollars each.

Dated this 6th day of October, 1920.

M. T. DOOLING,

Judge.

132 Louis Cabiale and Andrew Donizello

[Endorsed] : Filed Oct. 6, 1920. W. B. Maling,
Clerk. By C. W. Calbreath, Deputy Clerk. [99]

Certificate of Clerk U. S. District Court to
Transcript of Record.

I, Walter B. Maling, Clerk of the District Court
of the United States, for the Northern District of
California, do hereby certify that the foregoing 99
pages, numbered from 1 to 99, inclusive, contain a
full, true and correct transcript of certain records
and proceedings, in the case of The United States of
America, vs. Louis Cabiale and Andrew Donizello,
No. 8602, as the same now remain on file and of
record in this office ; said transcript having been pre-
pared pursuant to and in accordance with the prae-
cipe for transcript on writ of error (copy of which
is embodied herein), and the instructions of the at-
torney for defendants and plaintiffs in error herein.

I further certify that the cost for preparing and
certifying the foregoing transcript on writ of error
is the sum of Forty-two Dollars and Ten Cents
($42.10) and that the same has been paid to me by
the attorney for the plaintiffs in error herein.

Annexed hereto are the original writ of error
(page 101), return to writ of error (page 104) and
original citation on writ of error (page 105).

IN WITNESS WHEREOF, I have hereunto set
my hand and affixed the seal of said District Court,
this 26th day of April, A. D. 1921.

[Seal] WALTER B. MALING,

Clerk,
By C. M. Taylor,
Deputy Clerk. [100]

vs. The United States of America. 133

In the Southern Division of the United States
District Court for the Northern District of
California, First Division.

No. 8602.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

LOUIS CABIALE et al.,

Defendants.

Writ of Error.

United States of America, — ss.
The President of the United States of America to
the Honorable Judges of the Southern Division
of the United States District Court for the
Northern District of California, GREETING:
Because in the record and proceedings, as also in
the rendition of the judgment of a plea which is in
the said District Court before you, or some of you,
between the United States of America, plaintiff, and
Louis Cabiale and Andrew Donizello et al., defend-
ants, manifest error hath happened, to the great
damages of the said Louis Cabiale and Andrew
Donizello, as by their complaint appears;

We, being willing that error, if any hath been,
should be duly corrected, and full and speedy jus-
tice done to the parties aforesaid in this behalf, do
command you, if judgment be therein given, that
then, under your seal, distinctly and openly, you
send the record and proceedings aforesaid, with all

134 Louis Cabiale and Andrew Donizello

things concerning the same, to the United States
Circuit Court of Appeals for the Ninth Circuit,
together with this writ, so that you have the same at
the City of San Francisco, in the State of California,
wTithin thirty days from the date hereof in the said
Circuit Court of Appeals, to be then and there held,
that, the record and proceedings aforesaid being in-
spected, the said Circuit Court of Appeals may
cause further to be done therein to correct that error,
what of right, and according to the laws and customs
of the United States, ought to be done. [101]

WITNESS, the Honorable EDWARD DOUG-
LAS WHITE, Chief Justice of the United States,
the 6th day of October in the year of our Lord one
thousand nine hundred and twenty.

[Seal] Attest: WALTER B. MALING,

Clerk of the U. S. District Court for the Northern
District of California.

By C. M. Taylor,
Deputy Clerk.
AND NOW, to wit, on this 6th day of October
1920, IT IS ORDERED, that the foregoing writ of
error be and the same is hereby allowed.

M. T. DOOLING,
District Judge. [102]
Due service and receipt of a copy of the within
writ of error is hereby admitted this 6th day of
October 1920.

PRANK M. SILVA,
Attorney for Plff .

[Endorsed] : No. 8602. In the Southern Division
of the United States District Court for the Northern

vs. The United States of America. 135

District of California, First Division. United
State of America, Plaintiff, vs. Louis Cabiale et al.,
Defendants. Writ of Error. Filed Oct. 6, 1920.
W. B. Maling, Clerk. By C. W. Calbreath, Deputy
Clerk. [103]

Return to Writ of Error.

The answer of the Judges of the District Court
of the United States of America, for the Northern
District of California, to the within writ of error :

As within we are commanded, we certify under
the seal of our said District Court, in a certain
schedule to this writ annexed, the record and all
proceedings of the plaint whereof mention is within
made, with all things touching the same, to the
United States Circuit Court of Appeals for the Ninth
Circuit, within mentioned, at the day and place
writhin contained.

We further certify that a copy of this writ was
on the sixth day of October, A. D. 1920, duly
lodged in the case in this court for the within
named defendant in error.

By the Court.

[Seal] WALTER B. MALING,

Clerk U. S. District Court, Northern District of
California.

By C. M. Taylor,
Deputy Clerk. [104]

136 Louis Cabidle and Andrew Donizello

In the United States Circuit Court of Appeals
for the Ninth Circuit.

No. .

LOUIS CABIALE and ANDREW DONIZELLO,

Plaintiffs in Error,

vs.

UNITED STATES OP AMERICA,

Defendant in Error,

Citation on Writ of Error.

United States of America, — ss.

The President of the United States to the United
States of America, GREETING:
You are hereby cited and admonished to be and
appear at a session of the United States Circuit
Court of Appeals for the Ninth Circuit to be holden
at the city and county of San Francisco in the
State of California, within thirty (30) days from
the date hereof, pursuant to a Writ of Error duly
issued and now on file in the Clerk's office of the
United States District Court for the Southern Divi-
sion of the Northern District of California, wherein
Louis Cabiale and Andrew Donizello are plain-
tiffs in error and you are defendant in error, to
show cause, if any there be, why the judgment
rendered against the said plaintiffs in error, as in
the said writ of error mentioned, should not be
corrected and why speedy justice should not be
done to the parties aforesaid in that behalf.

vs. The United States of America. 1?>7

WITNESS, the Honorable EDWARD DOUG-
LASS WHITE, Chief Justice of the United States,
this 6th day of October 1920.

M. T. DOOLING,
United States District Judge. [105]
Due service and receipt of a copy of the within
Citation on Writ of Error is hereby admitted this
6th day of October, 1920.

FRANK M. SILVA,
Attorney for Plff.

[Endorsed] : No. 8602. In the United States
Circuit Court of Appeals for the Ninth Circuit.
Louis Cabiale and Andrew Donizello, Plaintiffs
in Error, vs. United States of America, Defendant
in Error. Citation on Writ of Error. Piled Oct.
6, 1920. W. B. Maling, Clerk. By Lyle S. Morris,
Deputy Clerk. [106]

[Endorsed]: No. 3679. United States Circuit
Court of Appeals for the Ninth Circuit. Louis
Cabiale and Andrew Donizello, Plaintiffs in Error,
vs. The United States of America, Defendant in
Error. Transcript of Record. Upon Writ of Error
to the Southern Division of the United States Dis-
trict Court of the Northern District of California,
First Division.
Filed April 26, 1921.

F. D. MONCKTON,
Clerk of the United States Circuit Court of Appeals
for the Ninth Circuit.

By Paul P. O'Brien,

Deputy Clerk.

138 Louis Cabiale and Andrew Donizello

In the United States Circuit Court of Appeals
for the Ninth Circuit.

No. .

LOUIS CABIALE and ANDREW DONIZELLO,

Plaintiffs in Error,
vs.

UNITED STATES OF AMERICA,

Defendant in Error.

Order Extending Time to and Including December
15, 1920, to File Record and Docket Cause.
Good cause appearing therefor, IT IS HERE-
BY ORDERED that the plaintiffs in error in
this cause may have and they are hereby granted
to and including the 15th day of December, 1920,
in which to file the record thereof and docket the
case with the clerk of this Court, and the time
for such filing and docketing is hereby enlarged
accordingly.

Dated : This first day of November, 1920.

WM. W. MORROW,
Circuit Judge.
Rec'd a copy of the within order this 1st day
of November, 1920.

FRANK M. SILVA,
U. S. Attorney.
ALBERT M. HARDIE,
Asst. U. S. Attorney.

[Endorsed] : No. 3679. In the United States Cir-
cuit Court of Appeals for the Ninth Circuit. Louis

vs. The United States of America. 139

€abiale and Andrew Donizello, Plaintiffs in Error,
vs. United States of America, Defendant in Error.
Order Under Rule Sixteen Enlarging Time within
which to File Record and Docket Cause. Piled
Nov. 5, 1920. P. D. Monckton, Clerk. Re-filed
Apr. 26, 1921. F. D. Monckton, Clerk.

In the United States Circuit Court of Appeals
for the Ninth Circuit.

No. .

LOUIS CABIALE and ANDREW DONIZELLO,

Plaintiffs in Error,

vs.

UNITED STATES OF AMERICA,

Defendant in Error.

Order Extending Time to and Including February
1, 1921, to File Record and Docket Cause.
Good cause appearing therefor, IT IS HERE-
BY ORDERED that the plaintiffs in error in
this cause may have and they are hereby granted
to and including the first day of February, 1921,
within which to file the record thereof and docket
the case with the clerk of this court, and the time
for such filing and docketing is hereby enlarged
accordingly.

Dated: this 14th day of December, 1920.

W. H. HUNT,
Circuit Judge.

140 Louis Cabiale and Andrew Donizello

The above order extending time within which
docket cause is hereby approved.

FRANK M. SILVA,

U. S. Attorney.
Receipt and service of within is hereby admitted
this 14th day of December, 1920.

FRANK M. SILVA,
U. S. Atty.
By J. I. COPESTAKE,

[Endorsed] : No. 3679. In the United States Cir-
cuit Court of Appeals for the Ninth Circuit. Louis
Cabiale and Andrew Donizello, Plaintiffs in Error,
vs. United States of America, Defendant in Error.
Order Under Rule Sixteen Enlarging the Time
Within Which to File Record and Docket Cause.
Filed Dec. 14, 1920. F. D. Monckton, Clerk. Re-
filed Apr. 26, 1921. F. D. Monckton, Clerk.

In the United States Circuit Court of Appeals
for the Ninth Circuit.

No,

LOUIS CABIALE and ANDREW DONIZELLO,

Plaintiffs in Error,

vs.

UNITED STATES OF AMERICA,

Defendant in Error,

Order Extending Time to and Including March 1,

1921, to File Record and Docket Cause.
4 Good cause appearing therefor, IT IS HERE-

vs. The United States of America. 141

BY ORDERED that the plaintiffs in error in
this cause may have and .they are hereby granted
to and including the first day of March, 1921, within
which to file the record thereof and docket the case
with the clerk of this court, and the time for such
filing and docketing is hereby enlarged accordingly.
Dated: This 31st day of January 1921.

WM. W. MORROW,

Circuit Judge.
The above order extending time within which to
docket cause is hereby approved.

FRANK M. SILVA,

U. S. Attorney.
By ALBERT M. HARDIE,
Asst. U. S. Attorney.

[Endorsed] : No. 3679. In the United States Cir-
cuit Court of Appeals for the Ninth Circuit. Louis
Cabiale and Andrew Donizello, Plaintiffs in Error,
vs. United States of America, Defendant in Error.
Order Extending Time. Filed Feb. 1, 1921. F. D.
Monckton, Clerk. Re-filed Apr. 26, 1921. F. D.
Monckton, Clerk.

In the United States Circuit Court of Appeals
for the Ninth Circuit.

No. 8602.

LOUIS CABIALE and ANDREW DONIZELLO,

Plaintiffs in Error,

vs.

UNITED STATES OF AMERICA,

Defendant in Error,

142 Louis Cabiale arid Andrew Donizello

Order Extending Time to and Including April lr
1921, to File Record and Docket Cause.
Good cause appearing therefor, IT IS HERE-
BY ORDERED that the plaintiffs in error in
this cause may have and they are hereby granted
to and including the first day of April, 1921, within
which to file the record thereof and docket the case
with the clerk of this court, and the time for such
filing and docketing is hereby enlarged accordingly.
Dated : This 26th day of February, 1921.

WM. W. MORROW,

Circuit Judge.
The above order extending time within which to
docket cause is hereby approved.

FRANK M. SILVA,
United States Attorney.
By BEN F. GEIS,
Asst. U. S. Attorney.

[Endorsed] : No. 3679. No. 8602. In the United
States Circuit Court of Appeals for the Ninth Cir-
cuit. Louis Cabiale and Andrew Donizello, Plain-
tiffs in Error, vs. United States of America, De-
fendant in Error. Order Under Subdivision 1 of
Rule 16 Enlarging Time to and Including Apr. 1,
1921, to File Record and Docket Cause. Filed Feb.
26, 1921. F. D. Monckton, Clerk. Re-filed Apr.
26, 1921. F. D. Monckton, Clerk.

No. 3679

IN THE

United States Circuit Court of Appeals

For the Ninth Circuit

Louis Cabiale and Andrew Donizello,

Plaintiffs in Error,

vs.

The Uxited States of America,

Defendant in Error.

BRIEF FOR PLAINTIFFS IN ERROR.

Chattncey P. Tramutolo,
Attorney for Plaintiffs in Error.

FILED

f OCT 4 - 1921 »

F. D. MONCKTON,

QUmK.

No. 3679

IN THE

United States Circuit Court of Appeals

For the Ninth Circuit

Louis Cabiale and Andrew Donizello,

Plaintiffs in Error,

vs.

The United States of America,

Defendant in Error.

BRIEF FOR PLAINTIFFS IN ERROR.

Abstract of the Case.

The plaintiffs in error, together with Pietro
Gabalo, G. Bertollotti, Peter Zurich, Attilio Parce-
ling Frank Colai and Dante Forasiepi, were in-
formed against in the Southern Division of the
District Court for the Northern District of Cali-
fornia for violating the so-called National Prohibi-
tion Act. The information, which will be found at
pages 2-21 of the Transcript of Record, is in eleven
counts, which charge or attempt to charge in sub-
stance as follows :

First Count.
That on the 22nd day of July, 1920, the defendants
therein named maintained a common nuisance at a

place known as the Gianduja Hotel, in that they
did keep on the premises certain claret wine of an
alcoholic content prohibited by the statute.

Second Count.

That the defendants on the same date did wilfully,
unlawfully and knowingly have in their possession
certain intoxicating liquor, to wit, claret wine.

Third Count.

That the defendants on the same day did sell cer-
tain intoxicating liquor, to wit, claret wine.

Fourth, Fifth and Sixth Counts.

These counts are identical in phraseology with the
third, each of them charging that the defendants
on the 22nd day of July, 1920, and at the same place,
did sell claret wine of prohibited alcoholic content.

Seventh Count.

That on the 23rd day of July the defendants, at
the same place, did unlawfully, wilfully and know-
ingly maintain a common nuisance, in that they did
then and there keep claret wine, jackass brandy,
vermouth, and mareschino of prohibited alcoholic
content.

Eighth Count.

That the defendants, on the 23rd day of July, did
unlawfully, wilfully and knowingly have in their
possession, on the same premises, > claret wine,
jackass brandy and mareschino.

Ninth Count.

That the defendants, on the 23rd day of July, at
the same place, did unlawfully, wilfully and know-
ingly furnish to George Poultney and C. W. Herbert
certain intoxicating liquor, to wit, claret wine con-
taining a prohibited alcoholic content.

Tenth Count.

That the defendants, on July 23rd, at the same
place, did unlawfully, wilfully and knowingly fur-
nish to George Poultney and C. W. Herbert certain
intoxicating liquor, to wit, cocktails.

Eleventh Count.

That on the last mentioned day, and at the same
place, the defendants did unlawfully, wilfully and
knowingly, sell certain intoxicating liquor, to wit,
whiskey.

The jury by its verdict (Transcript, page 27)
found the plaintiff in error Cabiale guilty on counts
two, three and eight, and the plaintiff in error Doni-
zello guilty on counts two, three, eight, nine and
ten. The other defendants were found not guilty
on all counts. The eleventh count was withdrawn
by the court from the consideration of the jury, by
reason of the fact that there was no evidence intro-
duced as to any sale of whiskey (Transcript, page
93). Thereafter the plaintiffs in error moved for
a new trial upon the ground that the verdict was
against the law, and the evidence, and also upon
the ground of newly discovered evidence. A motion

in arrest of judgment was also interposed (Tran-
script, page 105) upon the ground that the informa-
tion failed to state an offense against the laws of the
United States. These motions were denied by the
court, which thereupon passed judgment that both
of the plaintiffs in error be imprisoned for the
period of six months in the county jail (Transcript,
page 116).

A writ of error having been duly allowed, the
cause is before this court for review.

Specifications of Errors.

In accordance with the provisions of Rule 24 of
this court, we now specify the errors relied upon,
and shall set out the same separately and particu-
larly.

It is our contention that the judgment of the court
belowr should be reversed for the following errors,
to wit:

(1) That the court below erred in passing judg-
ment of imprisonment upon the plaintiffs in error
for the reason that count three of the information
does not state facts sufficient to charge any crime
against the United States, and the remaining counts
of the information upon which each of the plaintiffs
in error was convicted do not even attempt to al-
lege any violation of the Volstead Act for which a
penalty of imprisonment is provided.

(2) That the verdict of the jury and the judg-
ment of the court was againsl law in this, thai all

of the counts upon which each of the plaintiffs in
error was convicted was based upon the same alleged
violation of the law, and that the verdict and judg-
ment, therefore, violated the rule which prohibits
the splitting- of one transaction into several of-
fenses.

(3) That as to both of the plaintiffs in error, the
evidence was insufficient to justify the verdict.

(4) That the trial court erred in admitting in
evidence, over the objection of the plaintiffs in error,
certain tags taken from the cash register of the
Gianduja Restaurant (Transcript of Record, page
41) and also erred (Transcript, pages 86 and 87)
in denying the offer of the defense to introduce cer-
tain other tags in evidence.

(5) That the trial judge committed a plain error
within the meaning of Rule 11 of this court in giv-
ing the following charge to the jury :

"We have here a number of defendants
charged with a violation of the National Pro-
hibition Law. Now, I need not say to you that
whatever the sentiment is for or against the en-
forcement of this Prohibition Law, that is a
matter with wdiich you and I are not concerned.
Your duty, equally with mine, under your
oaths, and my oath, is to administer the law as
we find it, whether wre agree with the principle
or purpose of it, or not. We have in this court,
awaiting trial, some 200 or 300 defendants
charged under this law. Whether these men are

guilty or innocent will be determined by each
jury as the facts are presented to them. The
acquittal of a man who is guilty of any charge
simply encourages other men to go out and com-
mit a similar offense. No law can be enforced
without the assistance of the jury, who have
the tinal say in all criminal cases. Now, if juries
are going to acquit men who are guilty, the re-
sult will be that we will never get through. Un-
fortunately, this is the only court in this district,
extending from the county of Monterey to the
Oregon line, and from the Pacific Ocean to
Nevada, upon w7hieh the enforcement of this
law falls, and without the assistance of the jury
we cannot enforce it at all. I say this not to in-
fluence you in passing upon this case, or any
subsequent one, but to impress upon your minds
that in dealing with these matters you are deal-
ing writh a very important subject. We are
dealing with a lawr that has been adopted by a
majority, we must abide by it and attempt to
enforce it until such time, if that time ever
comes, that the law may be changed. It is also
true that men who violate this law do it because
they make money out of it. There is no ques-
tion of any principle involved in so far as they
are concerned. When they violate the law, they
violate it because they can make money by so
doing. Now, I think this court has been quite
vigilant in protecting the rights of citizens and
individuals from the sometimes over-zealous
acts of officers in the enforcement of this law,
but the court will be equally vigilant in uphold-
ing the officers in acts where they are acting
within the law. There can be no question of
the legality of the actions of the officers in the
present case."

We shall now proceed to a discussion of these
counts in the order indicated.

Brief of the Argument.

I.
the third COUNT of the information does not charge

ANY CRIME OR OFFENSE AGAINST THE UNITED STATES.

It was only upon the verdict finding the plaintiffs
in error guilty on the third count that the trial judge
had any jurisdiction to impose a sentence of im-
prisonment upon either of the plaintiffs in error.
This count attempts to charge them with having
made a sale of liquor on the 22nd day of July, 1920.
On the other counts of the information which charge
sales and on the first count, which charged the
maintaining of a nuisance, the plaintiffs in error
were found not guilty; while the counts other than
the third, on which they were convicted, merely
charged possession or furnishing of liquor, for which
a jail sentence could not, under the provisions of
the Volstead Act, be imposed (Section 29, Title II
of the National Prohibition Act). The trial judge
did not impose separate sentences on each of the
counts on which the defendants were convicted, but
passed a sentence of imprisonment upon each of
them, without any reference whatever as to the
separate counts. It was only on the verdict as to
count three that any sentence of imprisonment could
be passed. If, therefore, that count is fatally de-
fective, the judgment must be reversed.

The charging part of the third count reads as

follows :

"Did then and there wilfully, unlawfully and
knowingly, and in violation of Section 3, Title

II of the Act of October 28, 1919, known as the
National Prohibition Act, sell certain intoxicat-
ing liquors, to wit, claret wine, containing one-
half of one percent or more of alcohol by vol-
ume, and then and there fit for use for beverage
purposes. That the sale of the said intoxicat-
ing liquor by the said defendants, at the time
and place aforesaid, was then and there pro-
hibited and unlawful and in violation of Section
3 of Title II of the Act of Congress of October
28, 1919, to wit, the National Prohibition Act."

It will be noted that this count of the information
merely charges that the defendants did sell the liquor
therein referred to, and that the same was fit for use
for beverage purposes. It is not charged that the
liquor was, in fact, sold for beverage purposes.
Under the fundamental rules of law applicable to
indictments and informations, it must, therefore,
be presumed that the liquor was not, in fact, sold
for beverage purposes. The information must be
construed as against the pleader; no intendment or
inference can be indulged in favor of a defective
indictment or information.

The statute upon which this information is based
does not make all sales of liquor that is fit for use
for beverage purposes unlawful. If it attempted
to do so, it would be void, because the statute would
then transcend the power given to Congress by the
Eighteenth Amendment to the Constitution. It will
be conceded at the outset, we believe, that in the ab-
sence of a constitutional amendment Congress would
have had no power to pass such an act as the so-
called Volstead Act. Prior to the adoption of that

amendment the right to prohibit the sale of alcoholic
liquors rested solely within the police powers of
the several states. The Constitution of the United
States is a grant of power, and the various depart-
ments of the Federal Government possess only those
powers which are expressly or impliedly conferred
upon them by the Constitution.

So. Carolina v. United States, 199 U. S. 437;

Martin v. Hunter, 1 Wheaton, 304 ;

Sponner v. McConnell, 22 Fed. Cases No.
13,245;

United States v. McCullaugh, 221 Fed. 288.

An Act of Congress for the enforcement of a con-
stitutional provision is void if it is broader in its
terms than the constitutional provision which it was
enacted to enforce.

Karem v. United States, 121 Fed. 250.

Now the 18th Amendment to the Constitution
merely prohibits the manufacture, sale, and trans-
portation of liquor for beverage purposes. It would,
therefore, be beyond the power of Congress to pro-
hibit sales of liquor for other than beverage pur-
poses, and the third count of this information, which
merely charges a sale of liquor without alleging that
the sale was made for beverage purposes, charges a
crime which Congress had no constitutional power
to create.

Furthermore, the third count of this information
is insufficient, even under the Volstead Act itself.
The information does not even follow the language

of the statute. Section 6 of Title II of the Act pro-
vides that,

"No one shall manufacture, sell, purchase,
transport, or prescribe any liquor without first
obtaining a permit from the Commissioner so
to do."

For all that appears from the third count of the
information to the contrary, the defendants may
have had a permit from the Commissioner of In-
ternal Revenue authorizing them to sell liquor. An
information founded upon a statute must cover
every element included in the statutory definition of
the crime ; and exceptions contained therein must be
negatived, in order that the description of the crime
may in all respects coincide with the statute.
People v. Miles, 9 Cal. App. 312.

In that case it is said by Presiding Judge Cooper,

"The law does not presume any material fact
not stated in the information as all presump-
tions are in favor of innocence. If the matters
and things set forth in the information may be
true under certain circumstances, and the de-
fendant under such circumstances and condi-
tions not guilty of any crime, then the informa-
tion is not sufficient."

It was said by the Supreme Court of the United
States in United States v. Cook, 17 Wallace 169:

"Offenses created by statute at common law
must be accurately and clearly described in an
indictment, and if they cannot be in any case
without an allegation that the accused is not
within an exception contained in the statute
defining the offense, it is clear that no indict-

ment founded upon the statute can be a good one
which does not contain such an allegation, as
it is universally true that no indictment is suffi-
cient that does not accurately and clearly allege
all the ingredients of which the offense is com-
posed. With rare exceptions offenses consist of
more than one ingredient, and in some cases of
many; and the rule is universal that every in-
gredient of which the offense is composed must
be accurately and clearly alleged in the indict-
ment, or the indictment will be bad, and may be
quashed on motion, or the judgment may be ar-
rested, or be reversed on error."

In view of the failure of the information to follow
the statutory description of the crime attempted to
be charged, and for the reason tht any statute which
attempted to make it a criminal offense to sell liquor
for other than beverage purposes would be beyond
the power of Congress to enact, we submit that the
third count of the information charges no crime.
Since this count is the only count on which either of
the defendants was convicted on which a sentence of
imprisonment could be imposed, it was error of the
court to impose the same, and the judgment should
be reversed.

II.

THE TERDICT OF THE JURY AND THE JUDGMENT OF THE
COURT WAS AGAINST LAW.

An examination of the several counts in the in-
formation reveals the fact that the liquor which in
count three the defendants are charged with selling,
is the same as that which in other counts of the in-

formation they are charged with possessing and
furnishing. Obviously, liquor that is sold must also
be possessed. Furthermore, the evidence clearly
shows that the various offenses attempted to be
charged in the various counts of the information are
one and the same transaction. It is a sound rule
of law, founded upon the plainest principles of
natural justice that where a criminal act has been
committed, every part of which may be alleged in a
single count of an indictment and proved under it,
the act cannot be split into several distinct crimes.

III.

THE EVIDENCE WAS INSUFFICIENT TO JUSTIFY THE VERDICT.

It is our contention that the evidence in this case
is insufficient to justify the verdict, at least, in so far
as it relates to the third count, for two reasons.

First. The evidence fails to show a sale of liquor
by either of the defendants. It will be borne in
mind, as we have previously pointed out, that the
third count is the only count in the information
charging a sale on which the defendants were con-
victed. This count alleges a sale made by the de-
fendants on the 22nd of July of claret wine. Now,
the only testimony as to any sale of claret wine is
the testimony of the witness Poultney (Transcript,
page 30). Poultney's testimony in that behalf is as
follows :

"I was in the place of Mr. Cabiale with these
gentlemen on July 22nd, the evening before. I

saw Mr. Cabiale there, T believe, on that evening,

and I observed, as I was leaving, the gentleman
with the bald head next to Mr. Cabiale. On
that evening we bought four glasses of claret.
On the first night the time we went there they
charged 25c a drink for the claret; the next
night, for some reason, we did not pay anything
at all. The reason was everybody said the place
was raided and we had better get out of there,
so I, with my party, we got out, with the rest
of the patrons of the place. On the evening of
the 22nd we had two rounds, we drank the
claret ; one of the glasses we poured into a bot-
tle— one of the glasses of claret. The first night
I had spoken to Mr. Cabiale and told him that
I had come down for a little something to eat,
and I wanted to get something to drink, and he
said that was all right, I could have what I
wanted. I do not see anybody here of these de-
fendants that served the liquor on that night.
Mr. Cabiale ushered me to a seat and took my
order, and subsequently I was served by a
waiter. I gave my order for eats and drinks to
Mr. Cabiale."

This is the entire testimony with respect to the
sale made to George Poultney and party, as charged
in Count Three of the information. There were no
other witnesses to corroborate Mr. Poultney 's testi-
mony. There is no testimony in the entire tran-
script that the defendant Donizello was in the restau-
rant on July 22nd, as charged in Count Three of
the information. The witness Poultney does not
testify that he ordered claret or any other intoxicat-
ing liquor from Cabiale, and he states specifically
that the person who served him with the liquor was
not one of the defendants on trial. The only evi-

dence as to the alcoholic content of this alleged claret
is as follows: Poultney testifies (pages 30-31) that
on the evening of the 22nd, he poured the contents
of one of the glasses into a bottle. On cross-exam-
ination, the witness admitted that he could not tell
the quantity of alcohol which a drink contained,
"except on a very strong drink" (page 31). R. F.
Love, the government chemist, w7ho testified as to
the alcoholic content of the exhibits, admitted that
grape juice, exposed to the air, will acquire the same
alcoholic content as wine when originally made. In
view of the failure of the witness to testify that he
had ordered any alcoholic liquor, and the admission
of the government's chemist that the alcoholic con-
tent of the exhibit might have been clue to exposure
to the air, w7e submit that the evidence is insufficient
as a matter of law to justif}^ the verdict.

Second. Even if the evidence hereinabove quoted
should be held sufficient to have justified the jury in
drawing an inference that the defendant Cabiale au-
thorized the sale of claret to Poultney and his party,
nevertheless, the conviction on the third count of
the information must be reversed for another reason.
Poultney was a government officer, testifying, "I am
a Federal Prohibition Agent, and have been such
since the time prohibition took effect, some time in
January, 1920." He then proceeds to give the testi-
mony previously quoted to the effect that he went
into the Gianduja Restaurant on the night in ques-
tion and solicited the defendant Cabiale to make the

sale of liquor alleged in Count Three of the informa-
tion.

This brings the case clearly within the rule of the
agent provocateur. That rule has been well stated
by Presiding Justice Gilbert of this court in Woo
Wai v. United States, 223 Fed. 415. That case, as
this court will remember, was an indictment for an
alleged conspiracy on the part of the defendants
to smuggle certain Chinese across the border from
Mexico into the United States. The evidence showed
that the commission of the alleged offense was sug-
gested by Federal officers. After reviewing the evi-
dence, Judge Gilbert says:

"We are of the opinion that it is against pub-
lic policy to sustain a conviction obtained in
the manner which is disclosed by the evidence
in this case, and that a sound public policy can
only be upheld by denying the criminality of
those who are thus induced to commit acts which
infringe the letter of the criminal statutes. ' '

The earlier authorities, state and Federal, to the
same effect, are collected and quoted from elabor-
ately in the footnote to the decision in the Woo Wai
case, in 137 C. C. A. 609.

In the later case of Sam Yick v. United States,
240 Fed. 60, the Woo Wai case and the earlier cases
to the same effect are cited with approval, and this
court reiterates its stand that it will no! sanction
a conviction for a crime incited by the solicitation
of Government officers.

In United States v. Echols, 253 Feci. 862, the
court, after stating the agent provocateur rule, goes
on to say:

"This rule does not proceed from or rest
on any limitation of the right of the officers
of the law to obtain evidence of crime in any
manner possible, nor is it a defense to a prose-
cution that the officer participated in the com-
mission of a crime, if the genesis of the idea,
or the real origin of the criminal act, sprang
from the defendant and not from the officer;
or as the differentiation is well stated in 12
Cyc. 160: "The fact that a detective or other
person suspected that the defendant was about
to commit a crime, and prepared for his detec-
tion, as a result of which he was entrapped in
its commission, is no excuse, if the defendant
alone conceived the original criminal design/
But this statement in no manner authorizes
Government officers, employed to prevent crime
and apprehend criminals, to thus conceive and
set on foot the commission of an offense merely
in order to make an arrest. "

In the case at bar the evidence of Poultney herein
above quoted clearly shows that the offense of sell-
ing liquor, if any were committed, was committed
at the instigation and suggestion of Poultney him-
self. There is no conflict about that phase of the
evidence. The test has been laid down in the fore-
going cases is this: was the criminal offense sug-
gested by the officer or did it originate in the mind
of the accused? In the former case the undoubted
law prevalent in the federal courts is that a convic-
tion of the accused for a crime suggested by the
officer will not be upheld. Now it appears in this

case without contradiction that the sale charged in
the third count of the indictment had its genesis
in the mind of Poultney and not in the mind of
Cabiale. The latter made no suggestion as to any
sale of liquor; it was the government officer who
went to the restaurant keeper and told him that he
wanted to get something to drink. Had it not been
for Poultney 's request and suggestion the sale would
not have been made.

As to the defendant Donizelo, there is not a word
of evidence to uphold his conviction on Count Three
in view of Poultney 's testimony that he did not see
him on the night of July 22nd. It is true that the
evidence shows that Donizelo was one of the owners
of the Gianduja Restaurant, but that alone is not
sufficient to charge him with liability for the act of
his partner or of one of his employes which he did
not authorize. Proof of express authorization is
necessary to charge one with criminal responsibility
for the acts of another.

The cases are uniform to this effect. We will

call the attention of the court to a few of them. In

People v. Green, 22 Cal. App. 45, 50, it is said :

"The civil doctrine that a principal is bound
by the acts of his agent within the scope of
the latter ?s authority has no application to
criminal law (1 McLain on Criminal Law, sec.
188). While false pretenses may be made to
(by?) an agent of (to?) the person defrauded,
yet when made by an agent they must be di-
rectly authorized or consented to in order to
hold the principal, for authority to do a crimi-
nal act will not be presumed (1 McLain on
Criminal Law, sec. 683)."

- Commonwealth v. Stevens, 155 Mass. 291, 29 N. E.
508, was a prosecution for illegally selling liquor
to a minor. The evidence showed that the sale was
made by the clerk of the defendant. The court says :

"The criminal liability of a master for the
act of his servant does not extend so far as his
civil liability, inasmuch as he cannot be held
criminally for what the servant does contrary
to his orders, and without authority, express
or implied, merely because it is in the course
of his business, and within the scope of the
servant's employment; but he would be civilly
liable for a tort of this kind (George v. Gobey,
128 Mass. 289; Eoberge v. Burnham, 124 Mass.
277)."

In Grant Bros. Const. Co. v. United States, 13
Ariz. 388, 114 Pac. 955, it is said :

"This act, a statute of the United States,
being penal in its consequences, must be strictly
construed, and as knowledge is the principal
and indispensable ingredient of the offense, the
government, the plaintiff in the case, must be
held to proof of such knowledge or to proof of
circumstances from which it might be fairly
inferred. Unless the evidence, therefore, af-
fords proof of knowledge by the construction
company, or proof of circumstances from which
such knowledge may be fairly inferred, of the
acts of Carney and his associates, the construc-
tion company cannot be held liable for such
acts of Carney, for the master or principal is
not liable criminally for the unlawful acts of
his agents or servants, though such unlawful
act be committed in the master's business, un-
less such unlawful act was directed by him or
knowingly assented to or acquiesced in."

In State v. Heneghan, 7;} West Virginia 706, 81
S. E. 539, we read:

"The relation of principal and agent, or of
employer and employe, is not recognized in
the criminal law. By that law, every man must
stand for himself."

In cases involving the alleged illegal sale of liquor,
the decisions are uniform to the effect that the mas-
ter is not criminally liable for illegal sales made by
his clerk, servant or agent, without his knowledge
or consent, express or implied, or in his absence and
in disobedience to his commands or instructions.
For example, under the Iowa statute relating to
liquor nuisances, it was held that one is not liable
criminally for an unlawful sale made without his
knowledge and consent by his clerk.

State v. Hayes, 67 Iowa 27 ; 24 N. W. 575.

See also to the same effect :

Grosch v. Centralia, 6 111. App. 107 ;
Lathrope v. State, 51 Ind. 192 ;
Wadsworth v. State (Texas), 34 S. W. 934.

Thus it has been held that a conviction of selling
intoxicating liquor without a license cannot rest
upon the evidence merely that the person who made
the sale was the defendant's clerk, in the absence of
any evidence that defendant authorized the sale or
participated therein.

Daniel v. State, 149 Ala. 44; 43 S. 22;
Seibert v. State, 40 Ala. 60.

To warrant a conviction for sales made by de-
fendant's bartender in violation of the law, it must
appear that defendant gave no orders not to make
such sales, or that if such orders were given they
were not in good faith.

Commonwealth v. Tittlow, 28 Pa. Co. Ct. 341.

In the Rhole Island case of State v. Burke, 15
R. I. 324, 4 Atl. 761, it was held that one cannot be
convicted of maintaining a liquor nuisance by proof
of sales on Sunday by an agent without proof of
knowledge on the part of defendant, and without
proof of authority, either express or implied.

For these reasons we submit that the evidence
was insufficient to justify the verdict on the 3rd
count as to either of the plaintiffs in error, and
that the judgment of the imprisonment imposed
upon such conviction should be reversed.

IV.

THE TRIAL COURT COMMITTED ERROR IN ITS RULINGS AS
TO THE TAGS FOUND IN THE CASH REGISTER.

During the testimony of H. M. Kupser (Tran-
script, page 42), one of the prohibition agents who
testified on behalf of the government, the following
evidence was given:

"I noticed as the various waiters would come
up with their tags, they would have some sort
of a tag and wTould produce it at the cashier's,
where he registered it, and the amount was
rung up according to what appears on the tag.

The tags were then pul in the cash register. T
got some of these tags which were in the bundle
in the cash register. I did not put any marl;
on them, I put no identification marks on them.

I believe they were turned over to Mr. Sham;
that is, after we arrived hack at the Agent's
office they were put in his desk.

Thereupon the United States Attorney of-
fered the said tags in evidence; the two offered
read as follows:

'Gianduja, Waiter No. 10, Check No. 24.
Number of persons. 2 Cafe Roval $1. 1 whisky,
74 cents. 2 Wine, 50 cents, $2.25. War Tax, 10
cents. $2.35.

Gianduja Restaurant, Waiter No. 10, check
No. 36. Short 25 cents. 2 Cafe Roval $1. 2
whiskey $1.25. 1 wine 25. Total, $250.'

To the introduction of this evidence counsel
for the defendant then and there objected upon
the grounds that there was no means of identi-
fying the said tags and that the same were not
taken pursuant to a search-warrant.

The Court (Transcript, p. 41). You cannot
raise that question here in the middle of the
trial. There is a time and place to try that
issue. You cannot try it here now.

Mr. Tramutolo. Here is our situation

The Court (interrupting). I do not care to
hear about it from you now. I am quite famil-
iar with the law, and have been quite lenient
with defendants in enforcing it.

Mr. Tramutolo. We are trying a collateral
matter here as to checks that were found there.

The Court. We are not trying any collateral
matter. These men are charged with the sale
of liquor. They say they did not sell the liquor
there. In their cash register is found a check
which on its face purports to be a check for
the sale of whiskey and the sale of wine. The
defendants can make such explanation about
that as thev desire later on.

To this ruling of the court counsel for the
defendants then and there duly excepted."

This ruling of the court was manifest error. If
it had been shown that the two tags which were in-
troduced in evidence were issued on the night in
question, it would, of course, have been proper to
admit them. But under the circumstances no proper
foundation had been laid for their introduction. It
was not shown when the tags were issued or when
the sales were made. The testimony of the witness
shows that they were part of a bundle of tags found
in the cash register, which might for all that appears
to the contrary have been there for five years. Ac-
cording to the testimony given by the defendants
the tags in question were old tags which had been
retained because of some mistake made by the
waiters, and which had been kept in the register
since a time ante-dating the enactment of the Na-
tional Prohibition Act. No foundation having been
properly laid for their introduction the admission
of these tags was error highly prejudicial to the de-
fendants in that it created an inference that they
were making a busines of illegally selling whiskey.
It should require little argument to point out the
obvious absurdity of the theory that a restaurant
keeper violating the National Prohibition Act would
keep documentary evidence of his crimes in his
own cash register. In any event it was manifestly
error to the defendants to deny their effort (page 86
of Transcript) to introduce all of the tags of July
22 and 23, the days on which the defendants were

charged with violating {lie law. The Governmenl
certainly had no right to take two lags of a desig-
nated day, which might have been before the enact-
ment of the Prohibition Act, and seek to charge
the defendants with a violation of the law. It was
likewise doubly unfair to deny the defendants the
right to introduce in evidence all of the tags in the
cash register which were issued on the two days
mentioned in the information, in order to show that
there was no record of any sales of liquor.

THE LANGUAGE OF THE TRIAL JUDGE WAS PLAIN ERROR.

We have set forth in the second sub-division of
this brief the language used by the trial judge in the
introductory portion of his charge to the jury. This
language was highly objectionable and wTas palpably
prejudicial to the defendants. The trial judge told
the jury in substance that the calendar of the court
was overcrowded, that there were some three hun-
dred defendants waiting trial for alleged violations
of the Prohibition Act and that unless they con-
victed guilty men, the result would be "that we will
never get through". He furthermore told the jury
that men who violated the Prohibition Act did so
"because they make money out of it" (Transcript,
pages 90-91).

This language of the trial judge amounted to a
statement that the defendants were guilty and that

action. Where the line must be drawn between
comment upon the evidence of fact which is
and that which is not permissible is determined
only by an examination of the language and a
consideration of the circumstances of each par-
ticular case."

In the case of Starr v. U. S. 153 U. S. 614, the

late Chief Justice Fuller, in commenting upon an

objectionable charge by the trial judge as to the

necessity of enforcing the law, says :

" Whatever special necessity for enforcing
the law in all its rigor there may be in a particu-
lar quarter of the country, the rules of which
and the manner in which the administration of
justice should be conducted are the same every-
where, and argumentative matter of this sort
should not be throtvn into the scales by the judi-
cial officer who holds them" (italics ours).

In this case, the trial judge by telling the jury
that the court would never get through with its work
and that the acquittal of a guilty man encouraged
others to commit the same offense informed the jury
in substance that they should find the defendants
guilty. Such a charge violates the fundamental and
constitutional right of the defendant to the honest
and conscientious verdict of the jury influenced by
improper suggestions or insinuations or coercive
words by the trial judge. It has also been held that a
judgment of conviction will be reversed for conduct
by the trial judge calculated to produce in the minds
of the jury the impression that the judge has a fixed
opinion that the defendant is guilty and should be
convicted.

Adler v. IT. S., 104 C. C. A. 608.

Another recent case also holds thai where the evi-
dence in a criminal prosecution is sharply contra-
dictory, it is peculiarly essential that in charging

the .jury there should be freedom from error.
Erhardt v. U. S., 268 Fed. 326.

It is respectfully submitted that for the errors
herein complained of the judgment should be re-
versed.

Dated, San Francisco,
October 3, 1921.

Chauncey F. Tra^iutolo,

Attorney for Plaintiffs in Error.

No. 3679

IN THE

United States Circuit Court of Appeals

For the Ninth Circuit

LOUIS CABIALE and ANDREW

DONIZELLO,

Plaintiffs in Error,

vs.

THE UNITED STATES OP AMERICA,

Defendant in Error.

BRIEF FOR DEFENDANT IN ERROR

JOHN T. WILLIAMS,

United States Attorney.

THOMAS J. SHERIDAN,

Assistant United States Attorney.
Attorneys for Defendant in Error.

Neal. Stratford & Kerr, S. F. 10770

No. 3679

IN THE

United States Circuit Court of Appeals

For the Ninth Circuit

LOUIS CABIALE and ANDREW
DONIZELLO,

Plaintiffs in Error,
vs.

THE UNITED STATES OF AMERICA,

Defendant in Error.

BRIEF FOR DEFENDANT IN ERROR

STATEMENT OF THE CASE.

The plaintiffs in error, together with certain
other persons, were charged with certain ofTenses
in an information of eleven counts filed in the Dis-
trict Court of the Northern District of California.
Plaintiffs in error were convicted upon certain
counts, including the third count in which it was
charged that they and the other defendants on
July 22, 1920, at 1549 Stockton Street, in San Fran-
cisco, and within the jurisdiction of the Court,

"did then and there unlawfully, willfully and
knowingly in violation of Section 3, Title II of
the Act of October 28, 1919, known as the
National Prohibition Act, sell certain intoxi-
cating liquor, to wit, claret wine, containing
one-half of one per cent or more of alcohol by
volume and then and there fit for use for bev-
erage purposes. That the sale of the said in-
toxicating liquor by the said defendants at the
time and place aforesaid was then and there
prohibited and unlawful and in violation of
Section 3 of Title II of the Act of Congress of
October 28, 1919, to-wit, the ' National Prohi-
bition Act.' "

They were also convicted upon two other counts
charging unlawful possession of intoxicating
liquors, and the defendant Donizello was also con-
victed on the ninth and tenth counts, charging the
unlawful furnishing of intoxicating liquors. The
two plaintiffs in error so convicted were sentenced
to be imprisoned in the county jail for six months.

The testimony shows generally that at the times
in question the defendants Cabiale" and Donizello
conducted a restaurant at No. 1549 Stockton Street,
San Francisco, known as the Gianduja Restaurant;
that on July 22, 1920, a prohibition enforcement
agent went to the restaurant and called for and was
served with wine at one of the tables therein. On
the following evening he made another similar pur-
chase just before the place was raided by several
enforcement agents and a considerable quantity of
liquors seized and taken away. The testimony ap-

pearing in the transcript I'min pages 29 to 89, is too
voluminous to be quoted or summarized here. Jt
will be referred to in more detail in connection with
the discussion of subdivision III of the brief of
plaintiffs in error, wherein they challenge the suf-
ficiency of the evidence.

The points relied on for reversal are five, which,
stated briefly, are:

1. Insufficiency of Count III of the Information.

2. That the rule against splitting one trans-
action into several offenses was violated.

3. Insufficiency of the evidence to justify the
verdict.

4. Error in receiving in evidence certain incrim-
inatory tags; and

5. Error of the Court in giving a certain general
charge in regard to the necessity for the enforce-
ment of law, etc.

B.
ARGUMENT.

I. THE THIRD COUNT OF THE INFORMA-
TION WAS SUFFICIENT.

It is pointed out that the judgment necessarily
depends upon the validity of the third count of the
Information in that the remaining counts on which
convictions were had would not authorize the
penalty of imprisonment, and since the third count,

if valid, would authorize the six mouths penalty
imposed that alone need be considered.

An argument is adduced to show that had Con-
gress made it unlawful to make any kind of a sale
of intoxicating Liquor, it would have been in excess
of its power under the Eighteenth Amendment.
But since it is conceded that the Volstead Act does
not make all such sales of liquor invalid, the author-
ities so cited need not be considered. It is com-
plained that it is not charged in the particular
count that the liquor was sold for beverage pur-
poses, and that, the averment being construed
against the pleader, it must be presumed that it
was not sold for beverage purposes. This argument
gives no consideration to the provisions of Sec-
tion 32 of the National Prohibition Act providing
as follows:

"Sec. 32. In any affidavit, information, or in-
dictment for the violation of this Act, separate
offenses may be united in separate counts and the
defendant may be tried on all at one trial and the
penalty for all offenses may be imposed. It shall
not be necessary in any affidavit, information, or
indictment to give the name of the purchaser or
to include any defensive negative averments, but
it shall be sufficient to state that the act com-
plained of was then and there prohibited and un-
lawful, but this provision shall not be construed
to preclude the trial court from directing the
furnishing the defendant a bill of particulars
when it deems it proper to do so."

The information clearly measures up to the re-
quirements of that section. It is distinctly averred

therein that the sale of intoxicating liquor by the de-
fendant at the time and place alleged "was then and
there prohibited and unlawful." This averment
would exclude the possible presumption that the
liquor was sold for a proper or innocent purpose.
An analogous statute providing for an almost identi-
cal rule of pleading is the Harrison Narcotic Act
and effect has been given to such a statute in the fol-
lowing cases :

Fyke v. United States, 254 Fed. 225, 228;
Mclanson v. United States, 256 Fed. 783, 785 ;
Rothman v. United States, 270 Fed. 31;
Wallace v. United States, 243 Fed. 300, 305.

The argument of plaintiffs in error is not directed
to the insufficiency of the information as viewed in
the light of this phase of the statute. But it was
held in the Fyke case, supra, that there was no con-
stitutional objection to that character of legislation,
the court saying in that behalf:

"We can not agree with the contention that
Amend. Art. 6 of the Federal Constitution would
prevent Congress from so enacting. An indict-
ment, tho it failed to exclude defendant from the
excepted classes, would sufficiently inform him
of the nature of the accusation against him."

It is further said that the third count does not
show but that defendant may have had a permit au-
thorizing them to sell liquor ; that the exception must

be negatived. But the exception has been negatived
in the manner pointed out by the Act in that it is
alleged that the sale was "prohibited and unlawful."
The language of this Court in Young v. United
States, 272 Fed. 967, in referring to a prosecution
under the same Act, is pertinent in that behalf, to-
wit:

"The charge follows the language of the stat-
ute with sufficient description to inform the de-
fendant of the nature of the offense charged and
the cause of the accusation, and with such cer-
tainty that he could prepare his defense and
plead the judgment in bar of any subsequent
prosecution for the same offense. This is suf-
ficient. United States v. Simmons, 96 U. S. 360,
24 L. Ed. 819."

II. NEITHER VERDICT NOR JUDGMENT
WAS AGAINST LAW.

In this subdivision of their brief, plaintiffs in
error complain that their alleged offense was split
up improperly into several distinct crimes and such
acts stated in subsequent counts of the indictment
and thus their rights were violated. The argument
in this paragraph is meager and does not contain an
analysis of the voluminous testimony to show that
this complaint is well founded, nor is there citation
of authority, either to illustrate the argument or sub-
stantiate the point. But since it is manifest that
the third count is good, and sufficient alone to sup-
port the judgment or sentence imposed, the remain-

bag counts whether sufficient or insuffiei or

invalid, may be disregarded.

Claasen v. United States, 142 U. S. 140, 35 L.

Ed. 966;

Doe v. United States, 253, Foci. 903, 904.

III. THE EVIDENCE IS AMPLY SUFFI-
CIENT TO JUSTIFY THE VERDICT OF
GUILTY ON THE THIRD COUNT RENDERED
AGAINST BOTH PLAINTIFFS IN ERROR.

It is complained that the evidence fails to show a
sale of liquor by either of the defendants. It may
be pointed out in the beginning that the defendants
are not in a position to raise this question, in that
they did not move for a directed verdict at the close
of the testimony. It appears (Tr. p. 63) that counsel
so moved at the end of the Government's case, but
the motion having been denied, it was not thereafter
renewed, although eleven witnesses thereafter testi-
fied for the defendants and four testified for the
Government in rebuttal. In such a situation the
defendants are not entitled to question the sufficiency
of the evidence.

Clark v. U. S. 245 F. 112.

But if the question could be raised, the evidence
is amply sufficient to show an unlawful sale of
claret wine by the two plaintiffs in error and this
on July 22 and also on July 28, 1920. Of course, it
would be sufficient in support of the count to show a
sale on either date. A sale is amply proven by the

testimony of witness Poultney. Besides testifying
as indicated on pages 12 and 13 of the defendants'
brief wherein he states that he went to the restau-
rant on July 22, spoke to Mr. Cabiale, told him he
had come down for a little something to eat and to
get something to drink, and he, Cabiale, said "that
was all right he could have what he wanted."
Cabiale thereupon ushered him to a seat and took
his order and subsequently he was served by a
waiter. He gave his order for eats and drinks to
Cabiale, it further appears that Cabiale and Doni-
zello were the owners and in charge of the res-
taurant, and that they were present. And same
witness further states on page 32: "I say that
Mr. Cabiale, one of these defendants, took my
order. I am positive that I asked him for claret.
I did not procure any liquor on the evening of the
22nd other than those four glasses of claret.' ' And
it appeared that on having given his order to
Cabiale, whatever it was, he was subsequently
served by a waiter and served with claret. A por-
tion of the claret was taken away and shown to be
fit for a beverage and containing forbidden per-
centages of alcohol. On the following evening,
Friday, July 23d, the same witness went to the
restaurant and ordered and was served first with
claret and then with cocktails, and a portion of the
claret and cocktails were taken by the officers in
the subsequent raid. When Poultney was served
with the liquors, as he states on July 23rd, the
other officers of the Government raided the place.

At that time it seems the place was lull of patrons

some witnesses estimate that one hundred and fifty
people were there, and witness states that as soon
as the officers came in, the waiters were running
through the place1 saying, "Throw your wine away,
the place is being raided; drink up your wine
quick." Other waiters were seen carrying trays
with what appeared to be wine and some of them
on being accosted threw the liquor into the air.
Witnesses identified Cabiale as being there on Fri-
day evening, for example, the witness Kupser (Tr.
p. 42). As for Donizello, lie admitted in testifying
in his own behalf that he was one of the owners of
the restaurant; that he was in the restaurant on
Friday evening, July 23rd, and that he was taking
care of the cash register, as the witness Kupser
states. Donizello further admitted on cross exami-
nation (Tr. p. 82), "As proprietor I have super-
vision of the service that is made to patrons. When
I have time I go through the dining room and various
places to see that patrons are served. I know what
patrons receive by way of service in my restaurant.
Whatever may be served is served with my knowl-
edge and authority." This testimony should be
considered with the testimony of the officers that
they seized a large quantity of liquor from the
several tables, which, upon being examined, showed
a forbidden alcoholic content, and that the liquor
was quite visible. It does not appear that there was
any particular concealment. While Donizello ad-
mits his presence on Friday evening, he was also

shown to be there on the previous evening. As

Poultney states (Tr. p. 34), "Aside from Coppola,
Cabiale and Donizello I do not recognize any of the
other five defendants. On Thursday night I saw
Mr. Cabiale and the gentleman behind him; on Fri-
day night I saw Mr. Cabiale and the gentleman
behind him and the other gentleman, Mr. Coppola.
The Bill of Exceptions does not formally identity
the person described as "the gentleman behind
him," but the jury were able to make this identifi-
tion, and we have the statement of defendants'
counsel in making a motion to the Court which fixes
the identifications (Trans, p. 65), speaking of the
witness Poultney, he states: "He testified that on
Thursday night he saw Cabiale there, the gentle-
man who is seated right behind here, and the gen-
tleman behind him, Mr. Donizello. The presump-
tions in this matter being with the Government and
it being incumbent upon plaintiffs in error to show
error, the record is insufficient to show that Poult-
ney did not identify Donizello as being present on
Thursday evening. Donizello admits that he vTas
present on Friday evening, and it being shown to
the jury that both defendants were owners and
managers, were actually present in superintending
the management and in conducting the business,
one actually participating in taking an order for
claret, and that both partners could clearly see that
liquors were being used and dispensed by the wait-
ers and were paid for at the cashier's desk to Doni-
zello himself, the jury could not have done other-
wise than find the defendants guilty.

As to the suggestion that the testimony shows

C7C3 •

that the case was within the rule of "agent pro-
vocateur," little need be said. The two lines of
cases on this subject are well understood. It is
undoubted that the line of cases of which Woo Wax

r. United States, 223 Fed. 415, is a type, state a well
settled rule. On the other hand, there is a line of
cases of which

Rothman v. U. S. 270 F. 31, 34 ;
Ramsey e. U. S. 268 F. 825, 827;
Farley v. U. S. 269 F. 721, 725.

are types, which equally support a doctrine more
applicable to the case here, which is to the effect
that where the agents of the Government have reason
to believe that the law is being violated, especially
where the defendants have formed a system of violat-
ing the law continuously, the officers have the right
and duty of offering their patronage or requesting
service or purchasing contraband liquors, as the case
may be, to enable them to learn of the customary
activities of the defendant and thus vindicate the
law. Where a restaurant is conducting a flourishing
business and selling liquors to all comers, as shown
here, it is not at all a case of an unlawful entrapment
for a Government agent to offer to patronize the
business and thus secure evidence of the unlawful
course of dealing. When Cabiale was asked to serve
the claret, it appears that he was quite ready to serve
it and had a supply on hand ; but he could not have
had such supply on hand unless he had previously

violated the law. The case is clearly of the type of
the line of cases last above cited.

Little need be said as to counsel's theory that
neither ( Jabiale nor Donizello arc liable because their
employees may have acted independently without
their direction; that if the waiters sold wine con-
trary to their wishes they would not he liable. But
the cases cited contain the concession that this au-
thor i 1 y may be express or implied. Manifestly in the
case at bar if not expressed it was implied. The
proprietors were actually present and even if blind
could not have been ignorant of the fact that the
wine was flowing freely and that revenues obtained
from the sale thereof were coming into their own
coffers, as was at times even indicated by the telltale
tags. The evidence is amply sufficient to justify the
verdict as against the two convicted defendants.

IV. THE TAGS FOUND IN THE CASH
EEGISTER OF PLAINTIFFS IN ERROR AT
THE TIME OF THE RAID WERE PROPERLY
RECEIVED IN EVIDENCE : THEY WERE NOT
SUBJECT TO THE OBJECTION MADE BY
THE DEFENDANTS.

As pointed out, the plaintiffs in error conducted a
restaurant, and it was shown that they had a cash
register near the front entrance, which was in charge
of defendant Donizello. As previously arranged,
Officer II. M. Kupscr, who testified for the Govern-
ment, was instructed to take his position near the
cash register where the checks were paid, and he

there received and took charge of Liquors which were
taken from various portions of the restaurant (/Trans.
p. 39). lie testified (Trans, p. 40):

4fcI noticed as the various waiters would come
up with their tags, they would have some sort of
a tag and would produce it at the cashier's,
where he registered it, and the amount was rung
up according to what appeared on the tag. The
tags were then put in the cash register, I got
some of those tags on that evening. These are
some of those tags which were in the bundle in
the cash register."

The witness believes they were turned over to Mr.
Sliaen after they arrived back at the Agent's office.
The record continues : Thereupon the United States
Attorney offered the said tags in evidence; the two
offered read as follows :

"Gianduja Restaurant, Waiter No. 10, Check
No. 24. Number of persons. 2 Cafe Royal $1.
1 Whiskey, 74 cents. 2 Wine, 50 cents, $2.25.
War tax, 10 cents. $2.35."

" Gianduja Restaurant, Waiter No. 10, Check
No. 36. Short 25 cents. 2 Cafe Royal $1. 2
Whiskey $1.25. 1 wine 25. Total $2.50."

The record then proceeds:

"To the introduction of this evidence counsel
for the defendant then and there objected upon
the grounds that there was no means of indenti-
fying the said tags and that the same were not
taken pursuant to a search-warrants

The court overruled the objection and counsel ex-
cepted. It is not clear what was meant or would be
implied from that portion of the objection that "there
was no means of identifying the said tags." Mani-
festly there were means. It is not an objection that
the proposed exhibit would be irrelevant, nor that
there was not proper foundation laid for the offer.
If such objection were meant, it is clear that when
the witness states that he watched the course of busi-
ness and saw the various waiters bring up tags, have
them registered, the tags then put in the cash regis-
ter, and that he "got some of those tags/' and that
"these are some of those tags which were in the
bundle in the cash register," when the Government
offered "the said tags in evidence," the proper
foundation was laid. It is easy to divine from the
record, however, that counsel, as well as the Court,
had principally in mind the latter portion of the ob-
jection, to wit, that they were not taken pursuant
to a search warrant. This objection is not now
pressed. Manifestly it could not be in view of the
fact that it is stated by one of the Government Agents
(Trans, p. 31) that a search warrant was procured
for the purpose of searching the place. The record
does not disclose either the contents or tenor of this
search warrant nor the inventory or return that was
made thereon. In the absence of such showing the
presumptions would be with the Government. If,
on the other hand, the incriminatory tags were made
at the time of the raid and thus would not probably
be described in the search warrant, plaintiffs would

be impaled upon the other horn of the dilemma in
that the tags were an element of the crime, then and
there being committed, and for which plaintiffs in
error were arrested and tin4 tags could have boon and
were properly seized as an incident to a lawful arrest.

Weeks v. United States, 232 U. S. 383, 58 L.
Ed. 652, 655 ;

1 Bish. Crim. Proc. See. 211.

The Court was also justified in refusing to enter-
tain the objection that the tags were taken without
a proper search warrant in that it was not proper
to raise that collateral issue without notice in the
middle of the trial.

Adams v. New York, 192 U. S. 585, 48 L. ed.
575.

If there be exceptions to this rule, they are cases
where the facts are so far conceded as to dispense
with the necessity of a trial of a collateral issue. In
other words, a situation where a mere statement of
the transaction shows that there was a violation of
the Fourth Amendment. It is very clear that we
have not such a case here.

V. THE LANGUAGE OF THE TRIAL JUDGE
IN HIS GENERAL INSTRUCTIONS WAS NOT
IMPROPER: IT WAS EMINENTLY APT AND
A WISE OBSERVATION UNDER THE CIR-
CUMSTANCES.

Exception is now taken to a certain portion of the
general charge of the trial judge given at the trial

which is quoted at page 5 of conusors brief and ap-
pears beginning at page 89 of the transcript. But
the criticisms arc rather belated, for, at the time the
genera] charge was given, no exception whatever was
taken thereto. (Tr. pp. 89-98). Counsel was appar-
ently so well satisfied that he did not except to or
request any modification of the language now com-
plained of. Later at the time he petitioned for a
writ of error and filed assignments of error he had
not even then conceived that the charge was in such
respect subject to critcism, for it is not specified as
one of the assignments of error. Subsequently, some
change came over his views and he now strongly
animadverts as against the particular language used.
At the threshold we object to the consideration of the
point for the reason that under the well settled rule
no general exception to such a charge can be allowed
in a Bill of Exceptions, nor can any exception to a
portion of the charge be afterwards urged unless it
is taken before the jury retires. It is also true that
counsel are confined in their argument to their as-
signments of error filed with the petition for a writ
of error. The latter may not be a hard and fast rule,
for under the rule the Court may notice a plain error
unassigned. But the necessity for an exception to
the charge has a more fundamental basis in its sup-
port, for, if counsel at the time the charge was given
had indicated by either exception or objection to the
trial Judge that his language was deemed unfair or
coercive, he could readily, if the point were well

taken, have altered the language and given the neces-
sary cautionary admonitions to the jury before it
retired. Failing such exception or objection, counsel
is now conclusively presumed to have accepted the
charge as being entirely fair and proper.

Allis r. United States, 155 U. S. 117, 123;
39 L. Ed. 91, 93.

But if the matter were open to consideration,
there is nothing in the charge that can be reason-
ably excepted to. It appears that the trial was the
first of the term and the Court anticipating that the
jury would be present for the term conceived it to
be beneficial and to be its duty to state to the jurors
some general observations regarding their duties
as jurors, and did so in the first few paragraphs
of the charge. The statements were avowedly
general and not made with reference to the par-
ticular case. The jurors were told at the threshold
that "the jury are the sole judges of the facts."
They were admonished as to the duty of law en-
forcement and told that whether defendants in gen-
eral awaiting trial were guilty or innocent was to
be determined by each jury as the facts were pre-
sented. They were given to understand that the
acquittal of a man who is guilty encourages vio-
lations of the law and that the assistance of the
jury is required in law enforcement. There can be
no criticism of these general observations, and that
they were intended to be general and not to have

reference to the particular case appears x>atcntly
from the charge. Having so discussed the situa-
tion, the Court expressly declares "Now that brings
us to a consideration of the ease itself." There-
upon the Court delivered a general charge which
was not excepted to, and in which with great ability
and signal care guarded all possible rights of the
defendants; the jury were expressly told (p. 97)
that "It is for the jury to determine whether any
of these defendants are guilty," and also "The
defendants in this case, as in any case upon trial
in this Court for a criminal offense, are presumed
to be innocent, and that assumption attaches at the
commencement of the trial and remains with them
until the jury have determined otherwise by their
verdict if they so determine, "and the jury should
not so determine unless they are satisfied of the
guilt of the defendants beyond a reasonable
doubt." That the charge was entirely proper and
could not have violated any rights of the defendants
is clear from the authorities.

Allis v. U. S., 155 U. S. 117, 123; 39 L. ed. 91,
93.

Simmons v. U. S. 142 U. S. 148; 35 L. ed. 968.

Keller r. U. S. 168 Fed. 697.

Savage v. U. S. 270 Fed. 14, 21 ;

Horning v. District of Columbia, 253 U. S.
; 65 L. ed. ;

Adv. Opinions, 64.
We confidently urge that the conviction of plain-

tiffs in error be upheld and that the judgment be

affirmed.

Respectfully submitted,

JOHN T. WILLIAMS,

United States Attorney,

THOMAS J. SHERIDAN,

Assistant U. S. Attorney,
Attorneys for Defendant in Error.

No. 3681

Htttfeh diatai

(fttrotti (tart of Appeals

('. HENRY SMITH,

Plaintiff in Error,
vs.

A. 0. LINDVIG,

Defendant in Error.

WtmtBttxpt of SterorJu

Upon Writ of Error to the Southern Division of the

United States District Court of the

Northern District of California,

Second Division.

FILED

MAY 5j

F« D. MQ1MCK

Filmer Bros. Co. Print, 830 Jackson St., S. P., Cal.

No. 3681

Mttitpb hiatal

ffltrmit fflmtri fff Appeal*

9mr % NUttlf ©trratt.

C. HENBY SMITH,

Plaintiff in Error,

vs.

A. 0. LINDVIG,

Defendant in Error.

WvmtBttxpt of l&nntb.

Upon Writ of Error to the Southern Division of the

United States District Court of the

Northern District of California,

Second Division.

Filmer Bros. Co. Print, S30 Jackson St., S. P., Cal.

INDEX TO THE PRINTED TRANSCRIPT OF

RECORD.

[Clerk's Note: When deemed likely to be of an important nature,
errors or doubtful matters appearing in the original certified record are
printed literally in italic; and, likewise, cancelled matter appearing in
the original certified record is printed and cancelled herein accord-
ingly. When possible, an omission from the text is indicated by
printing in italic the two words between which the omission seems to
occur.]

Page

Amended Answer to Complaint 15

Assignment of Errors and Prayer for Reversal . 228

Bill of Exceptions, Engrossed 24

Bill of Particulars 3

Bond on Writ of Error 251

Certificate of Clerk U. S. District Court to Rec-
ord on Writ of Error 253

Certificate of Judge to Bill of Exceptions 226

Citation on Writ of Error 257

Complaint 1

Engrossed Bill of Exceptions 24

Exceptions to Alleged Bill of Particulars, No-
tice of Motion to Strike Same from the
Piles, and Notice of Motion for Further Bill
of Particulars 11

EXHIBITS:

Exhibit "D" — Unsigned Letter Dated Jan-
uary 16, 1915, to A. 0. Lindvig 202

Exhibit "E"— Letter Dated February 8,
1915, A. 0. Lindvig to C. Henry Smith,
Inc 204

Exhibit "F"— -Unsigned Letter Dated De-
cember 28, 1915, to A. 0. Lindvig. . . . 205

ii C. Henry Smith

Index. Page

EXHIBITS— Continued:

Exhibit "G"— Letter Dated May 3, 1917,

A. 0. Lindvig to C. Henry Smith 208

Exhibit "H"— Unsigned Letter Dated

June 28, 1917, to A. O. Lindvig 210

Plaintiff's Exhibit No. 1 — Supplementary
Account Dated July 14, 1917, Rendered
A. 0. Lindvig by C. Henry Smith 146

Plaintiff's Exhibit No. 2 — Supplementary
Account Dated July 16, 1917, Rendered
A. 0. Lindvig by 0. Henry Smith 148

Plaintiff's Exhibit 3 — Statement of Account
Dated October 15, 1917, Rendered A. 0.
Lindvig by C. Henry Smith 150

Plaintiff's Exhibit 4— Pinal Statement of
Account — Supplementing Statement
Dated October 15, 1917, Rendered A. 0.
Lindvig by 0. Henry Smith 154

Plaintiff's Exhibit 5 — Statement of Account
Substituted for Statement Dated Octo-
ber 15, 1917, Rendered A. O. Lindvig by
C. Henry Smith 158

Plaintiff's Exhibit 7— Excerpt' from Bill of

Lading for Voyage No. 1 of "Regulus" 199

Plaintiff's Exhibit 8— Excerpt from Bill of

Lading for Voyage No. 2 of " Regulus" 199

Plaintiff's Exhibit 9 — Excerpt from Letter
Dated November 10, 1917, A. 0. Lind-
vig to 0. Henry Smith 201

Plaintiff's Exhibit 10— Letter Dated July
18, 1917, A. O. Lindvig to C. Henry
Henry Smith 70

vs. A. O. Lindvig. iii

Index. Page

EXHIBITS— Continued :

Plaintiff's Exhibit 11— Letter Dated No-
vember 8, 1917, C. Henry Smith to A. O.
Lindvig 73

Plaintiff's Exhibit 11 — Unsigned Letter
Dated November 8, 1917, to A. 0. Lind-
vig 171

Plaintiff's Exhibit 13—Statement of Sal-
vage— S, S. "Sinaloa" 173

Plaintiff's Exhibit 16— Bills of Lading. ... 165

Defendant's Exhibit "JJ"— Night Letter
Dated March 8, 1917, C. Henry Smith
Inc. to United States Shipping Board . 56

Defendant 's Exhibit " KK " — Telegram
Dated March 10, 1917, United States
Shipping Board to C. Henry Smith,
Inc 57

Defendant 's Exhibit " LL " — Telegram
Dated March 12, 1917, C. Henry Smith,
Inc. to William Denman 58

Defendant 's Exhibit ' ' MM ' ' — Telegram
Dated March 12, 1917, Chairman United
States Shipping Board to 0. Henry
Smith 59

Defendant 's Exhibit " NN " — Telegram
Dated March 14, 1917, C. Henry Smith,
Inc. to William Denman . . . 60

Defendant's Exhibit "00" — Cablegram
Dated March 16, 1917, C. Henry Smith
to S. Lindvig 60

Defendant's Exhibit "PP"— Letter Dated

*v C. Henry Smith

Index. Page

EXBIBITS^Continued :

March 29, 1917, C. Henry Smith, Inc. to

United States Shipping Board 61

Defendant 's Exhibit " QQ " — Telegram

Dated March 29, 1917, United States

Shipping Board to C. Henry Smith. . . 62

Defendant 's Exhibit " RR ' '—Cablegram

Dated March 29, 1917, C. Henry Smith

to S. Lindvig 63

Defendant 's Exhibit "SS ' '—Cablegram
Dated March 29, 1917, C. Henry Smith

to S. Lindvig 63

Defendant's Exhibit "TT"— Letter Dated
April 24, 1917, C. Henry Smith to A. O.

Lindvig 67

Defendant's Exhibit "W"— Statement of
Account Dated June 1, 1917, Rendered
by C. Henry Smith, Inc. to A. 0. Lind-
vig 65

Defendant's Exhibit 4-G — Contract Dated
September 19, 1916, Between Ynchausti

y Cia and A. 0. Lindvig 96

Defendant's Exhibit 4^0 — Letter Dated Oc-
tober 24, 1917, A. 0. Lindvig to C. Henry

Smith 170

Defendant's Exhibit 4-Q — Excerpt from
Letter Dated October 27, 1917, B. Lind-
vig to C. Henry Smith , 125

Defendant's Exhibit 4-S — Contract Dated
July 10, 1917, Between C. Henry Smith
and E. I. Dupont de Nemours & Co ... 119

vs. A. 0. Lindvig. v

Index. Page

EXHIBITS— Continued :

Defendant's Exhibit No. 4-Z— Unsigned
Letter Dated October 31, 1917, Ad-
dressed to Captain P. Hosvlef Ill

Defendant's Exhibit No. 5- A — Unsigned
Letter Dated October 6, 1917, Ad-
dressed to A. 0. Lindvig 112

Defendant's Exhibit No. 5-B — Letter Dated
October 12, 1917, A. O. Lindvig to C.

Henry Smith 189

Defendant's Exhibit No. 5^D — Unsigned
Letter Dated November 21, 1917, Ad-
dressed to A. 0. Lindvig 115

Defendant's Exhibit No. 5-F — Unsigned
Letter Dated July 11, 1917, Addressed

to W. A. Simonton 117

Defendant's Exhibit 50 — Report for the
Year 1917 Rendered Bjarne Lindvig by

A. 0. Lindvig 78

Judgment on Verdict 23

Names and Addresses of Attorneys of Record. 1
Order Allowing Writ of Error and Fixing

Amount of Biond 250

Order Denying Motion to Strike Out Bill of

Particulars, etc 14

Order Extending Time to and Including Febru-
ary 10, 1920, Within Which to File Record

and Docket Cause 259

Order Extending Time to and Including March
10, 1920, Within Which to File Record and
Docket Cause 260

vi C. Henry Smith

Index. Page

Order Extending Time to and Including April
10, 1920 Within Which to File Record and
Docket Cause 261

Order Extending Time to and Including May
10, 1920, Within Which to File Eecord and
Docket Cause 262

Order Extending Time to and Including June
10, 1920, Within Which to File Record and
Docket Cause 263

Order Extending Time to and Including July
10, 1920, Within Which to File Record and
Docket Cause 264

Order Extending Time to and Including August
10, 1920, Within Which to File Record and
Docket Cause 265

Order Extending Time to and Including Septem-
ber 10, 1920', Within Which to File Record
and Docket Cause 266

Order Extending Time to and Including October
9, 1920, Within Which to File Record and
Docket Cause 267

Order Extending Time to and Including Novem-
ber 9, 1920, Within Which to File Record
and Docket Cause 268

Order Extending Time to and Including Decem-
ber 5, 1920, Within Which to File Record
and Docket Cause 269

Order Extending Time to and Including Janu-
ary 8, 1921, Within Which to File Record
and Docket Cause 270

vs. A. O. Lindvig. vii

Index. Page

Order Extending Time to and Including Febru-
ary 8, 1921, Within Which to File Record and
Docket Cause 271

Order Extending Time to and Including March
8, 1921, Within Which to File Record and
Docket Cause 272

Order Extending Time to and Including April
8, 1921, Within Which to File Record and
Docket Cause 273

Order Extending Time to and Including April
21, 1921, Within Which to File Record and
Docket Cause 274

Order Extending Time to and Including April
26, 1921, to File Record and Docket Cause. . 275

Order Extending Time to and Including May 4,

1921, to File Record and Docket Cause. ... 276

Order Extending Time to and Including May

10, 1921, to File Record and Docket Cause. . 278

Order Granting Plaintiff's Motion for an In-
structed Verdict, etc 22

Petition for Writ of Error 227

/Praecipe for Record on Writ of Error 252

Return to Writ of Error 256

TESTIMONY OK BEHALF OF DEFEND-
ANT:

BISHOP, JOHN A. 126

Recalled 143

DOELKER, FRED L 136

Cross-examination 138

McClelland, john 133

Cross-examination 135

viii C. Henry Smith

Index. Page

TESTIMONY ON BEHALF OP DEPEND-
ANT—Continued :

PAGE, WILPERT 131

SMITH, C. HENRY 25

Recalled 142

WALLACE, FRED W 141

Verdict 22

Writ of Error 254

Names and Addresses of Attorneys of Record.
Messrs. ANDROS & HENGSTLER, Kohl Build-
ing, San Francisco, and
Messrs. GOODFELLOW, EELLS, MOORE & OR-
RICK, Insurance Exchange Building, San
Francisco,

Attorneys for Plaintiff in Error.
Messrs, NATHAN H. FRANK and IRVING H.
FRANK, Merchants Exchange Building, San
Francisco,

Attorneys for Defendant in Error.

In the District Court of the United States, in and
for the Southern Division of the Northern Dis-
trict of California, Division Two.

No. 16,124.
A. O. LINDVIG,

Plaintiff,

vs.

C. HENRY SMITH,

Defendant.

Complaint.

Plaintiff complaining of defendant above named,
for cause of action alleges:

I.
That at all times hereinafter mentioned said plain-
tiff was, and still is, a citizen and subject of the
Kingdom of Norway, and an inhabitant of the city
of Christiania, in said Kingdom of Norway.

II.
That at all times hereinafter mentioned the said

2 C. Henry Smith

C. Hemy Smith, defendant above named, was, and
still is, a citizen of the State of California, and an
inhabitant of and residing in the city and county of
San Francisco, in said state.

III.

That within two years last past defendant col-
lected and received from divers persons certain sums
of money for account of the plaintiff, amounting,
in excess of all charges and expenses or amounts
due said defendant, to the sum of Seventy Thousand
Five Hundred Eighty-two and 72/100 (70,582.72)
Dollars, no part of which has been paid by defendant
to the plaintiff. [1*]

IV.

That before commencing suit herein, plaintiff, at
the city and county of San Francisco, State of Cali-
fornia, demanded payment of said sum from the de-
fendant.

That defendant has not paid the said sum, nor any
part thereof, although the same is due and owing
from said defendant to said plaintiff.

WHEREFORE, plaintiff prays for judgment
against said defendant in the sum of Seventy Thou-
sand Five Hundred Eighty-two and 72/100 (70,-
582.72) Dollars, together with interest and costs of
suit.

NATHAN H. FRANK,
IRVING H. FRANK,
Attorneys for Plaintiff. [2]

*Page-number appearing at foot of page of original certified Transcript
of Record.

vs. A. 0. Lindvig.

State of California,

City and County of San Francisco, — ss.

B. Lindvig, being first duly sworn, deposes and
says: That the said plaintiff, A. 0. Lindvig, is ab-
sent from the city and county of San Francisco, and
is now a resident of Christiania, in Norway, and is
therefore unable to verify this complaint in person,
wherefore said B. Lindvig verifies the same in the
place and stead ; that said B. Lindvig is the attorney
in fact of said A. 0. Lindvig, and as such is informed
of the matters and things in said complaint set
forth ; that he has read the foregoing complaint, and
knows the contents thereof, and that the same is true
of his own knowledge, except as to the matters which
are therein stated upon information and belief, and
that as to those matters he believes it to be true.

B. LINDVIG.

Subscribed and sworn to before me this 15th day
of December, 1917.

[Seal] CHARLES EDELMAN,

Notary Public in and for said City and County of

San Francisco, State of California.

[Endorsed] : Filed Dec. 17, 1917. W. B. Maling,
Clerk. By J. A. Schaertzer, Deputy Clerk. [3]

(Title of Court and Cause.)

Bill of Particulars.

In response to the demand for a bill of particulars
in the above-entitled cause, the plaintiff states that

1 C. Henry Swill/

the controversy upon which the complaint is based
arises out of transactions, all of the details of which
are in the exclusive knowledge of the defendant, and
the records of the moneys received are in his exclu-
sive possession; that plaintiff has no knowledge of
the accounts except such as is derived from state-
ments of account rendered by the defendant to the
plaintiff ; that no part of said statements so rendered
are in the possession of the plaintiff at Christiania,
Norway ; that in response to the said demand plain-
tiff files the following bill of particulars, being the
best that he can do at the present time, and that so
soon as said plaintiff, or his representatives, are ac-
corded an opportunity to examine the books and
papers in the possession of said defendant, he claims
the right to amend the following bill of particulars
or to extend it in such manner as he may feel war-
ranted, after obtaining the necessary information
from the books, accounts, and papers, now in the
possession of said defendant.

That on the 21st day of November, 1917, the said
defendant rendered to the plaintiff's agent, at San
Francisco, California, an account entitled:

" Corrected Statement, A. O. Lindvig, in A/C
C. Henry Smith — Final Statement — Sup-
plementing Statement Dated October 15,
1917."
That in reply thereto the attorney for said plain-
tiff addressed to said defendant a communciation in
the following words and figures: [4]

vs. A. 0. Lindvig. 5

" November 24, 1917.
C. Henry Smith, Esq.,
311 California Street,
San Francisco, Calif.
Dear Sir:

In re: LINDVIG ACCOUNT.

Respecting the account handed to me on November
21st, 1917, entitled, ' Corrected Statement A. 0. Lind-
vig— Account C. Henry Smith — Final Statement
Supplementing Statement dated October 15, 1917,'
I have to advise you on behalf of said A. 0. Lindvig,
and on behalf also of his duly authorized agent, Mr.
B. Lindvig, that said statement cannot be accepted as
correct in any particular.

Before entering upon further consideration of the
details of said account, we respectfully call upon
you,

1. For the statement referred to therein under
the first item of said account, namely,
'July 20. Balance due C. Henry Smith per cor-
rected statement 9/11/17 $24,108.97'

It may be that you have forwarded this statement
to Mr. A. O. Lindvig at Christiania, but you can
readily understand that the matter cannot be han-
dled from that end because of the present difficulties
of communication. It may be many months before
we would be able to receive a copy of that state-
ment from Christiania, and as the matter must be
handled at this end, we desire a copy of that state-
ment in order that we may examine the same and
determine whether or no the said balance with which

6 C. Henry Smith

you begin your 'Corrected Statement' is a true bal-
ance. [5]

2. We desire, also, the statement referred to in
your ' Corrected Statement' as ' Statement dated
October 15, 1917,' of which the one you have handed
us purports to be a supplement.

It must be apparent to you that we cannot pass
intelligently upon a 'Supplement' without having
before us at the same time the statement to which the
supplement refers.

3. We desire also, all vouchers in your posses-
sion necessary to support the above accounts.

Without waiving at the present time our right to

question any of the items in your said statement, we

wish to call your attention to the following items,

which upon their face are entirely inadmissible,

namely :

A claim for office remuneration re

contract hull 154, etc $ 10,000.00

Commission Dupont Powder Contract

25,517.80

Commission on inward freight i Gover-
nor Forbes' 2,049.65

Commission on purchase * Governor

Forbes 6,800.00

And your 'Sinaloa' salvage account,
which, so far as our present infor-
mation will permit us to specify, is
an overchange of at least, if no
more 3,165.27

E. I. Dupont de Nemours account over-
payment freight 3,119. 12

vs. A. 0. Lindvig. 7

Your retention of a balance of which
you state is an estimated amount
for procuring of bookings or

freight 5,000.00

We desire to advise you that the above specifica-
tions are made without prejudice to our right to fur-
ther question the items of the said account, which
right we are specifically reserving at the present
time.

We also call your attention to the fact that many
items in said account rendered us are mere sum-
maries, and [6] refer to other accounts for their
details.

We note your suggestion of alleged difficulties
experienced by you by reason of your former book-
keeper taking employment with Mr. B. Lindvig, but
we cannot concede the claims made by you in this
regard. The gentleman referred to has been at your
service without reserve, and there is nothing in the
account that you now present us which warrants the
claim you are making in that behalf.

Neither is it our disposition to argue with you
the matters referred to by you under your separate
letter entitled 'Re Commissions for procuring Du-
pont contract,' further than to say that your posi-
tion is untenable.

Anticipating your prompt compliance with the
requests hereinbefore contained,

I remain,

Very truly,
Yours, etc.,
NATHAN H. FRANK/ '

8 C. Henry Smith

That thereafter, on December 3d, 1917, the said
attorney for said plaintiff supplemented said letter
of November 24th, with a letter dated December
3d, 1917, in the words and figures following :

" December 3, 1917.
C. Henry Smith, Esq.,
311 California Street,

San Francisco, Calif.
Dear Sir:

In re: LINDVIG ACCOUNTS.
We have to acknowledge receipt of a letter dated
December 1, 1917, addressed to us by Mr. William
Denman, as a reply to our communication to you
under date of November 24th.

We note therefrom that the account submitted to
us under the heading * Corrected Statement A. 0.
Lindvig in A/C with C. Henry Smith Final State-
ment— Supplementing Statement [7] dated Octo-
ber 15, 1917' — is not intended as a supplement to
the Statement of October 15th, but as a substitute
therefor.

In this connection we have to advise you that
under date of November 27th, 1917, we received a
cable from Mr. A. O. Lindvig in which he states
that

' Smith's general statement dated fifteen ten
just received but not correct.'
We are making this reference so that you will
understand that neither the original nor the sub-
stituted statement will be accepted as a correct state-
ment of your account.

vs. A. O. Lindvig. 9

We wish, also, to call your attention to your
charge of $6,000.00 remuneration for attending to
Steamer 'Regulus', which we understand has been
heretofore protested by Mr. Lindvig as not allow-
able, and which protest is now renewed.

In his letter of December 1st, Mr. Deman, re-
ferring to the items on page 2 of my letter of No-
vember 24th, says:

1 Do I understand you to dispute these items,
or desire a conference upon them, or to deny
absolutely liability for them?'

It seemed to us very clear that when, in that con-
nection we said that 'the items upon their face are
entirely inadmissible,' that you would understand
that we 'deny absolutely liability for them,' but if
it was not so understood before, let it be so under-
stood now.

With the data at hand, we figure that you have
still in your possession moneys collected by you for
and on account of Mr. A. O. Lindvig, belonging to
him and which you have refused to pay over, in the
amount of $70,582.72, or thereabouts, as we there-
fore find ourselves on behalf of said A. O. Lindvig,
compelled to demand of you the payment of such
moneys to his duly authorized agent, Mr. B. Lindvig,
No. 280 Battery [8] Street, San Francisco.

A prompt reply to this would be appreciated.
Very truly,

Yours, &c,
NATHAN H. FRANK."

NHF:CMH.

That the items stated in said two letters, plus

10 C. Henry Smith

Twelve Thousand Fifty ($12,050) Dollars, for the
details of which we have sent to Christiana, and less
the item Three Thousand One Hundred and Nine-
teen and 12/100 ($3,119.12) Dollars, referred to in
our letter of November 24th, 1917, are the items
which constitute the bill of particulars, amounting
to Seventy Thousand Five Hundred Eighty-two and
72/100 ($70,582.72) Dollars, upon which this com-
plaint is based, viz.:

In the 3d article of the letter of Novem-
ber 24th, items amounting to $55,651 . 84

In the letter of Dec. 3d, remuneration for

attending to Steamer "Regulus" 6,000.00

Items to be received from Christiania .... 12,050.00

$73,701.84
Less item in letter of Nov. 24, E. I.
Dupont de Nemours account overpay-
ment freight 3,119.12

Balance $70,582.72

That so soon as further information comes to
hand upon the subject, plaintiff will be pleased to
supplement this bill of particulars with such further
statement as the information referred to may war-
rant.

Respectfully submitted,

NATHAN H. FRANK,
IRVING H. FRANK,
Attorneys for Plaintiff. [9]

vs. A. 0. Lindvig. 11

To Messrs. Andros Sd Hengstler, Substituted for
William Denman, Esq., and Denman & Arnold,
Attorneys for Defendant:
Please take notice that the foregoing is the "bill
of particulars as to the account set forth in the com-
plaint in the above-entitled action" demanded by
you on the 19th day of December, 1917.

NATHAN H. FRANK,
IRVING H. FRANK,
Attorneys for Plaintiff.
Service of the foregoing bill of particulars is ad-
mitted this 26th day of December, 1917.

ANDROS & HENGSTLER,

Attorneys for Deft.

[Endorsed] : Filed Dec. 29, 1917. W. B. Maling,
Clerk. By J. A. Schaertzer, Deputy Clerk. [10]

(Title of Court and Cause.)

Exceptions to Alleged Bill of Particulars, Notice of
Motion to strike Same from the Files, and No-
tice of Motion for Further Bill of Particulars.
To A. O. Lindvig, the Plaintiff Herein, and to
Messrs. Nathan H. Frank and Irving H. Frank,
His Attorneys :
Now comes the defendant above named, and ex-
cepts to the alleged bill of particulars heretofore
filed in said cause by plaintiff, upon the grounds
hereinafter set forth, and notifies you that upon the
same grounds, on Monday, January 7, 1918, at the
hour of ten o'clock A. M., or as soon thereafter as

12 C. Henry Smith

counsel may be heard, in the courtroom of said
court, in the city and county of San Francisco,
State of California, defendant will move said Court
to strike said alleged bill of particulars from the
tiles, and for an order requiring plaintiff to furnish
a further and proper bill of particulars. The
grounds for said exceptions and said motion are as
follows :

1. That the document so filed by plaintiff under
the title "bill of particulars" does not constitute in
any wise such a bill.

2. That the document so filed is argumentative,
irrelevant, and not responsive to defendant's de-
mand for a bill of particulars.

3. That since B. Lindvig, as the authorized
agent of plaintiff, has made and filed in said cause
an affidavit on attachment wherein it is stated un-
der oath: "That the said defendant in said action
is indebted to plaintiff in the sum of $70,582.72,
gold coin of the United States, over and above all
legal setoffs or counterclaims, upon an implied
contract for the direct payment of money, to wit,
money collected and received for the account of
plaintiff in the sum of $70,582.72, and that said
contract is payable in this state," and caused an at-
tachment to be issued and levied upon property of
defendant, compelling defendant to file a bond in
the sum of $80,000.00 [11] in order to procure the
release of same, plaintiff may not avoid or escape
furnishing a proper bill of particulars upon the
ground that "the controversy upon which the com-
plaint is based arises out of transactions all of the

vs. A. 0. TAndvig. 13

details of which are in the exclusive knowledge of
the defendant, and the records of the moneys re-
ferred to are in his exclusive possession."

4. That if said sum of $70,582.72 is ascertained
or arrived at or derived from any statement or
" statements of account rendered by defendant to
plaintiff," then plaintiff should specifically disclose
from what statement or statements of account so
rendered, said sum of $70,582.72 is derived, and how
and in what particular or particulars, if any, such
statement or statements are not proper.

5. That since said suit was filed in this District,
and the complaint verified by said B. Lindvig, and
the affidavit on attachment made by him, it is no
answTer to the demand for a bill of particulars, and
no excuse for failure to furnish same, "that no part
of said statements so rendered are in the possession
of the plaintiff at Christiania, Norway."

6. That the insertion in said alleged bill of par-
ticulars of the two letters from plaintiff's attorneys
to defendant, dated respectively November 24, 1917,
and December 3, 1917, is in no wise an answer to
defendant's demand for a bill of particulars, and is
an evasion of the same, and improper in that said
letters constitute self-serving declarations upon the
part of plaintiff, and do not in any wise tend to
make clear the basis for plaintiff's complaint or the
grounds upon which said sum of $70,582.72 is al-
leged to be owing by defendant to plaintiff.

7. That defendant is wholly unable, from the
complaint and the alleged bill of particulars filed
by plaintiff, to know or ascertain upon what plain-

14 C. Henry Smith

tiff relies to show the liability of defendant to plain-
tiff in the sum of $70,582.72, and cannot intelligently
or properly or at all answer said [12] complaint
or frame an issue or issues in said action which can
be properly tried by said Court.

Dated: San Francisco, California, January 3,
1918.

ANDROS & HENGSTLER,
Attorneys for Defendant.

[Endorsed] : Filed Jan. 4, 1918. W. B. Maling,
Clerk. By J. A. Schaertzer, Deputy Clerk. [13]

At a stated term, to wit, the November term, A. D.
1917, of the Southern Division of the United
States District Court for the Northern District
of California, Second Division, held at the
courtroom, in the City and County of San Fran-
cisco, on Monday, the 7th day of January, in
the year of our Lord one thousand nine hun-
dred and eighteen. Present: The Honorable
WILLIAM C. VAN FLEET, District Judge.

No. 16,124.

A. 0. LINDVIG

vs.
C. HENRY SMITH.

(Order Denying Motion to Strike Out Bill of
Particulars, etc.)
Defendant's motion to discharge attachment and
motion to make complaint more definite and certain

vs. A. 0. Lindvig. 15

and motion to strike out bill of particulars, etc.,
came on to be heard and after arguments were sub-
mitted and fully considered and it was ordered that
said motions to discharge attachment and to make
complaint more certain be and the same are hereby
denied and it is ordered that said motion to strike
out bill of particulars, etc., be and the same is hereby
denied, without prejudice. [14]

In the Southern Division of the District Court of
the United States, for the Northern District of
California.

A. 0. LINDVIG,

Plaintiff,

vs.

C. HENRY SMITH,

Defendant.

Amended Answer to Complaint.

Now comes the defendant above named, and by
leave of Court first obtained, files this his amended
answer to the complaint herein, and admits, alleges
and denies as follows:

Admits the allegations contained in Articles I,
II and IV of said complaint.

II.

Admits that as alleged in the complaint, defend-
ant received for account of plaintiff the sum of
$70,582.72, but denies that the same was in excess
of all charges and expenses or amounts due de-

16 C. Henry Smith

fendant, or charges, or expenses or amounts due de-
fendant, and in this behalf defendant alleges:

That within two years prior to the filing of the
complaint herein the plaintiff became indebted to
the defendant for work, labor and services rendered
by the defendant as the agent of the plaintiff, and
a1 his special instance and request, in the amount
of $70,582.72, as follows:

One. At the special instance and request of
plaintiff, defendant [15] about the 5th of Sep-
tember, 1916, negotiated a contract for the construc-
tion of a vessel known as "Hull 154" by the Bethle-
hem Steel Company, for the price of $775,000, and
thereafter and until about the 1st of October, 1917,
supervised the construction thereof ; that the reason-
able value of the services of defendant in this be-
half is $10,000, which said sum plaintiff agreed to
pay defendant ; no part of said sum has been paid.

Two. On the 10th day of July, 1917, at the
special instance and request of plaintiff, defendant
negotiated and made a contract between plaintiff
and Du Pont de Nemours Powder Company for the
transportation from the Eepublic of Chile to San
Francisco, California, and elsewhere of 40,000 tons,
10% more or less, of nitrate; that the reasonable
value of the services of defendant in this behalf is
the sum of $25,410.81, which plaintiff agreed to pay
defendant ; no part of said sum has been paid, except
the sum of $2,482.20.

Three. At the special instance and request of
plaintiff, defendant about January 1, 1916, nego-
tiated a contract for the construction of a vessel

vs. A. 0. Lindvig. 17

known as "Regulus" by the Union Iron Works,
for the sum of $450,000, and thereafter and until
the 1st day of April, 1917, supervised the construc-
tion thereof; that the reasonable value of the ser-
vices of defendant in this behalf is the sum of
$6,000, which plaintiff agreed to pay defendant; no
part of said sum has been paid defendant.

Four. At the special instance and request of
plaintiff and for and on his behalf, defendant on
or about the 8th day [16] of September, 1916,
purchased the vessel " Governor Forbes" for the
sum of $340,000; that for said services plaintiff
agreed to pay defendant the sum of $6,800; no part
of said sum has been paid to defendant.

Five. At the special instance and request of
plaintiff, defendant for and on behalf of plaintiff,
on or about the 20th day of June, 1917, entered
into contracts for and on behalf of plaintiff for the
salvage of the steamer "Sinaloa"; and thereafter
defendant, at the like instance and request of plain-
tiff, supervised the salvage of said vessel and at-
tended to the repair thereof; that the reasonable
value of defendant's services in that behalf is the
sum of $3,165.27, which the plaintiff agreed to pay
defendant; no part of which said sum has been
paid to defendant.

Six. On the 29th day of June, 1914, defendant
and plaintiff entered into an agreement in writing,
wherein and whereby it was agreed that defendant
should receive and retain 5% of the amount of all
the freight earned by certain ships owned by plain-
tiff and operated by defendant for plaintiff; that

18 C. Henry Smith

5% of the freight earnings of said steamship^
amounted to a sum far in excess of $21,688.84; that
all thereof has been paid defendant except said
sum of $21,688.84, no part of which has been paid.
That the said amounts so earned by defendant and
due him from plaintiff and unpaid, as alleged in
subdivisions One, Two, Three, Four, Five and Six
hereof, aggregating the sum of $70,582.72, were by
defendant deducted from the amounts received by
him for account of plaintiff, and were retained by
him, and the balance of his collections was [17]
remitted by him to plaintiff.

FIRST COUNTERCLAIM.

By way of further defense and counterclaim, de-
fendant alleges that at the special instance and
request of plaintiff, defendant about the 5th of
September, 1916, negotiated a contract for the con-
struction of a vessel known as "Hull 154' ' by the
Bethlehem Steel Company, for the price of $775,000,
and thereafter and until about the 1st of October,
1917, supervised the construction thereof; that the
reasonable value of the services of defendant in this
behalf is $10,000, which said sum plaintiff agreed
to pay defendant; no part of said sum has been
paid.

SECOND COUNTERCLAIM.

By way of further defense and counterclaim, de-
fendant alleges that on the 10th of July, 1917, at the
special instance and request of plaintiff, defendant
negotiated and made a contract between plaintiff
and Du Pont de Nemours Powder Company for the-
transportation from the Republic of Chile to San

vs. A. 0. Lindvig. 19

Francisco, California and elsewhere of 40,000 tons,
10% more or less, of nitrate; that the reasonable
value of the services of defendant in this behalf
is the sum of $25,410.81, which plaintiff agreed to
pay defendant; no part of said sum has been paid,
except the sum of $2,482.20.

THIRD COUNTERCLAIM.

By way of further defense and counterclaim, de-
fendant alleges that at the special instance and re-
quest of plaintiff, defendant about January 1, 1916,
negotiated a contract for the [18] construction of
a vessel known as the "Regulus" by the Union Iron
Works for the sum of $450,000, and thereafter and
until the 1st day of April, 1917, supervised the con-
struction thereof; that the reasonable value of the
services of defendant in this behalf is the sum of
$6,000, which plaintiff agreed to pay defendant; no
part of said sum has been paid defendant.

FOURTH COUNTERCLAIM.

By way of further defense and counterclaim, de-
fendant alleges that at the special instance and re-
quest of plaintiff and for and on his behalf, he pur-
chased the vessel " Governor Forbes" for the sum of
$340,000; that for said services plaintiff agreed to
pay defendant the sum of $6,800; no part of said
sum has been paid to defendant.

FIFTH COUNTERCLAIM.

By way of further defense and counterclaim de-
fendant alleges that at the special instance and re-
quest of plaintiff, defendant for and on behalf of
plaintiff on or about the 20th day of June, 1917, en-

20 C. Henry Smith

tered into contracts for and on behalf of plaintiff,
for the salvage of the steamer "Sinaloa," and there-
after defendant at the like instance and request of
plaintiff supervised the salvage of said vessel and
all ended to the repair thereof; that the reasonable
value of defendant's services in that behalf is the
sum of $3,165.27 ; no part of which said sum has been
paid to defendant.

SIXTH COUNTERCLAIM.
By way of counterclaim, defendant alleges that on
the 29th day of June, 1914, defendant and plaintiff
entered into [19] an agreement in writing,
wherein and whereby it was agreed that defendant
should receive and retain 5% of the amount of all
the freight earned by certain ships owned by plain-
tiff and operated by defendant for plaintiff; that
5% of the freight earnings of said steamships
amounted to a sum of far in excess of $21,688.84;
that all thereof has been paid defendant, except said
sum of $21,688.84, no part of which has been paid.

WHEREFORE, defendant prays to be hence dis-
missed with his costs.

ANDROS & HENGSTLER,
GOODFELLOW, EELLS, MOORE &
ORRICK,

Attorneys for Defendant.

United States of America,

State and Northern District of California,

City and County of San Francisco, — ss.

C. Henry Smith, being first duly sworn, deposes
and says: That he is the defendant in the above-
entitled action; that he has read the foregoing

vs. A. O. Lindvig. 21

amended answer to complaint and knows the contents
thereof; that the same is true of his own knowledge,
except as to the matters which are therein stated on
his information and belief, and as to those matters
he believes it to be true.

C. HENRY SMITH.

Subscribed and sworn to before me this 30th day
of January, 1919.

[Seal] T. L. BALDWIN,

Deputy Clerk U. S. District Court, Northern Dis-
trict of California.
Service admitted this 30th day of January, 1919.

NATHAN H. FRANK,
Attorney for Plaintiff.

[Endorsed] : Filed Jan. 30, 1919. Walter B.
Maling, Clerk. [20]

At a stated term, to wit, the March term, A. D. 1919,
of the Southern Division of the United States
District Court for the Northern District of
California, Second Division, held at the court-
room in the City and County of San Francisco,
on Friday, the 13th day of June, in the year of
our Lord one thousand nine hundred and nine-
teen. Present: The Honorable WILLIAM C.
VAN FLEET, District Judge.

No. 16,124.

A. 0. LINDVIG

vs.
C. HENRY SMITH.

22 C. Henry Smith

(Order Granting Plaintiff's Motion for an Instructed

Verdict, etc.)

The parties and the jury being present, the trial
was resumed. After further arguments by counsel,
plaintiff's motion for an instructed verdict was sub-
mitted and being considered it was ordered that the
motion be granted and the jury was instructed to
return a verdict in form as submitted. Thereupon
the following verdict was returned by the jury,
namely: "We, the jury find in favor of the plaintiff
and assess the damages against the defendant in the
sum of Seventy Seven Thousand Nine Hundred
Thirty Nine & 00/100 Dollars ($77,939.00). W. C.
Graves, Jr. Foreman." To which ruling by the
Court and to which verdict, the defendant duly ex-
cepted. Ordered that judgment be entered in accord-
ance with said verdict and for costs and that the jury
be discharged. Ordered that the defendant may
have a stay of execution for thirty days. [21]

(Title of Court and Cause.)

Verdict.

We, the jury, find in favor of the plaintiff and
assess the damages against the defendant in the sum
of Seventy-seven Thousand Nine Hundred Thirty-
nine and 00/100 Dollars ($77,939.00) .

W. C. GRAVES, Jr.,

Foreman.

vs. A. 0. Lindvig. 23

[Endorsed]: Filed June 13, 1919. Walter B.
Maling, Clerk. [22]

(Title of Court and Cause.)

Judgment on Verdict.

This cause having come on regularly for trial upon
the 28th day of May, 1919, being a day in the March,
1919, term of said court, before the court and a jury
of twelve men duly impaneled and sworn to try the
issues joined herein; Nathan H. Frank, Esq.,
appearing as attorney for plaintiff and Stanley
Moore and L. T. Hengstler, Esqrs., appearing as
attorneys for defendant; and the trial having been
proceeded with on the 29th day of May and the
3d, 4th, 5th, 6th, 10th, 11th, 12th, and 13th, days of
June, all in said year and term, and oral and docu-
mentary evidence upon behalf of the respective
parties having been introduced and closed; there-
upon the plaintiff moved for an order directing the
jury to return a verdict in its favor and said motion,
after submission, being granted, the jury returned
the following verdict which was ordered recorded,
namely: "We, the jury, find in favor of the plain-
tiff and assess the damages against the defendant
in the sum of seventy-seven thousand nine hundred
thirty-nine and 00/100 dollars ($77,939.00.) W. C.
Graves, Jr., Foreman, ' ' and the Court having ordered
that judgment be entered in accordance with said
verdict and for costs:

Now, therefore, by virtue of the law and by
reason of the premises aforesaid, it is considered

24 C. Henry Smith

by the Court that A. O. Lindvig, plaintiff, do have
and recover of and from C. Henry Smith, defend-
ant, the sum of Seventy-seven Thousand Nine Hun-
dred Thirty-nine and 00/100 ($77,939.00) Dollars
together with his costs herein expended taxed at
$471.25.

Judgment entered June 13, 1919.

WALTER B. MALING,

Clerk. [23]

In the Southern Division of the United States Dis-
trict Court for the Northern District of Cali-
fornia, Second Division.

No. 16,124.

A. O. LINDVIG,

vs.
C. HENRY SMITH,

Plaintiff,

Defendant.

Engrossed Bill of Exceptions.
BE IT REMEMBERED that the above-entitled
action came on regularly for trial on the twenty-
eighth day of May, 1919, before the above-entitled
court, Honorable WILLIAM C. VAN FLEET pre-
siding, and a jury duly empaneled and sworn,
Nathan H. Frank, Esq., and Irving H. Frank, Esq.,
appearing as counsel for plaintiff, Messrs. Andros
and Hengstler, and Messrs. Goodfellow, Eells, Moore
& Orrick appearing as counsel for defendant, and
that the following proceedings were had :

vs. A. 0. Lindvig. 25

Testimony of C. Henry Smith, in His Own Behalf.

C. HENRY SMITH, defendant in said action, was
called in his own behalf, was sworn, and testified
as follows :

Direct Examination.

I reside at 2164 Hyde Street, San Francisco, and
have been a resident of San Francisco ever since
1904, when I first came here.

In 1908 I went into the importing and exporting
business on my own account and have been engaged
in carrying on that business ever since. [24 — 1]

In 1913 I commenced to organize the company
that afterwards was known as the Baja-California
Company.

I organized the company. After I and friends
of mine in San Francisco had subscribed seventy-
five thousand ($75,000.00) dollars towards the
stock of this company, I sent Captain M. O.
Rustad to NorwTay, for the purpose of interesting
Norwegian capital. The company was to be in-
corporated as a Norwegian corporation. While
in Norway, Captain Rustad met Mr. A. O. Lind-
vig, a large ship owner. Captain Rustad then
cabled me asking if he should connect w^ith Mr.
Lindvig and investigate his standing, and I cabled
Captain Rustad to do so. I sent Captain Rustad
to Norway in the early part of 1914, and I went
over there myself in the early summer of 1914.

On June 29, 1914, and wiiile in Norway, I
entered into the following agreement with Mr. A.
O. Lindvig:

26 C. Henry Smith

(Testimony of C. Henry Smith.)

"Mr. A. 0. Lindvig, of Christiania, and Mr.
Benry Smith of San Francisco, have this day
made the following agreement with regard to A/S
Baja California, a steamship line to operate steam-
ers between Mexican and Central — American
ports — and West Coast of United States as well
as British Columbia.

"For the steamship line as aforementioned Mr.
Smith is to act as general-agent with authority
to appoint sub-agents, when required for securing
cargo northbound and southbound, fix charters,
v/hen sufficient inducements offer as well as make
all necessary arrangements for docking and clear-
ing of the steamer at the respective ports of call.

"It being also understood that the general-agent
or sub-agents are to make contracts at the lowest
competitive rates, for tallying and stevedoring.
On all freight earned a commission of 5 (five)
per cent is to be allowed Mr. Smith including any
allowance or allowances made to sub-agents; be-
sides this remuneration an allowance per steamer
is to be made to cover incidentals, stamps and
other disbursements for traveling expenses, as re-
quired, subject to special agreement.

"In the event any steamer or steamers of the
A/S Baja California are fixed by Mr. Smith for
other [25 — 2] voyages than as hereinbefore men-
tioned, or on time-charter a commission of 2V2 per
cent on the freight earned is allowed.

"This agreement is to remain in force for a

vs. A. 0. Lindvig. 27

(Testimony of C. Henry Smith.)

period of 3-three years provided the line referred

to above is maintained so long.

"Kristiania, 29th June, 1914."

On July 23, 1914, while at Christiania, I entered
into the following agreement with Mr. A. 0. Lind-
vig:

"It is hereby agreed between Mr. A. 0. Lindvig,
Christiania, and C. Henry Smith, San Francisco,
with regard to the handling of the steamers of the
Baja California line operating out of Pacific Coast
ports, that C. Henry Smith be authorized to charge
the actual outlays for stamps, telegrams and other
incidental as well as initial expenses incidental to
making all necessary arrangements in Central
America for the handling of the steamers there.
These outlays and expenses are calculated to
amount to about doll. 45 per steamer per month.

" Furthermore Mr. Smith may apply for a postal
subsidy from Mexican Government and the ex-
penses in this connection expected to be about
doll. 100 gold to be covered by the Baja California
line.

" Christiania, July 23d, 1914."

Two vessels were built for the Baja California
at Sunderland, England. These two were "Baja
California" and "Sinaloa."

On November 30, 1915, I cabled Mr. Lindvig:

"Have option six thousand (6000) tonner United
Engineering Works here model and arrangement
like steamer Sverre and oil burner delivery within
twelve months four hundred and fifty thousand

28 C. Henry Smith

(Testimony of C. Henry Smith.)
dollars 'tween deck and electric light fifteen
thousand extra. I can guarantee one hundred
thousand dollars subscription of stock this city,
if wanted, and further subscription South America
Builders have option steel only few days so please
telegraph quickly if interested. In case two boats
contracted sixteen months second delivery but
price then nine hundred and thousand dollars in-
cluding tween decks and all."

On December 3, 1915, I cabled Mr. A. O. Lind-
vig:

"Six thousand tonner deliverable 10/12 months
arranged for coal and oil otherwise good specifica-
tions price lowest and strictly net recommending
contract [26 — 3] offer one hundred thousand dol-
lars stock some of Dupont of officials also in-
clined."

Mr. FRANK. — Now, if your Honor please, I
renew my objection upon the face of that tele-
gram, because the telegram provides that the
amount is strictly net.

On December 6, 1915, I cabled Mr. A. O. Lind-
vig:

"Six thousand tonner lowest price account steel
now advanced and mills busy two years guaranteed
speed nine knots. Will subscribe hundred thou-
sand dollars stock. Some of Dupont officials will
also take shares. American built steamers con-
sidered higher value otherwise refer cable third."

On December 7, 1915, Mr. A. 0. Lindvig cabled
me:

vs. A. 0. Lindvig. 29

(Testimony of C. Henry Smith.)

"Accept 6000 tonner built. Highest class Lloyds
case need four hundred fifty thousand dollars pro-
vided good speed specifications delivery latest Oc-
tober 1916 and Clean terms contract telegraph."

On December 7, 1915, I cabled Mr. Lindvig:

"Contract six thousand tonner reading ten
twelve months builders say however October de-
livery very likely. Clean terms otherwise built
highest class Lloyds Veritas and Norwegian Board
of Trade subject American requirements. Tele-
graph."

By " Clean Terms" is meant that the contract
must be clear, so that the builders, on account of
hard terms in it, if the price of materials went up,
could not get out of it, if they liked. It has
nothing to do w7ith any commission.

On December 9, 1915, I cabled Mr. A. O. Lind-
vig:

" Please telegraph whether acceptance six thou-
sand tonner 0. K."

And on December 10, 1915, Mr. Lindvig cabled
me:

"Six thousand tonner accepted according ex-
changed telegram."

On December 10, 1915, Mr. A. O. Lindvig wrote
me as follows:
"Messrs. C. Henry Smith Inc.,

"San Francisco.
"Dear Sirs: [27—4]

"I beg to confirm my letter of 1st inst. and

30 C. Henry Smith

(Testimony of C. Henry Smith.)
further telegrams exchanged as per copies en-
closed,—

"3/M Schooner 'Archer.' I note you have pur-
chased this vessel and have retained $9,000 off the
remittance per 'Sinaloa' and 'Baja' in settlement
of my interest. I shall thank you to send me
further details concerning the purchase and trade
she was intended for.

"6000 Tonner. I note the builders have accepted
my offer of $450,000.00 for one 6000 tons steamer,
built highest class Lloyds, good specifications, fitted
for both oil and coal burning, delivery to take place
within October next year, and now await to re-
ceive contract with full particulars. — I note, you
are willing to take interest for $100,000, — and that
others are also inclined to take some stock, but as
I have not yet made up my mind if the steamer is
going to enter the 'BAJA CALIFORNIA' Com-
pany, I shall write you later on this subject. —
I am sorry my telegram of 7th did not reach in
ample time to secure the second steamer."

We bought her for the Mexican trade. I held
her for two or three w7eeks and sold her and sent
Mr. Lindvig half the profits, one-half of $12,000.
We had bought her for $18,000, and the $9,000
mentioned in the above letter was retained by me
off the remittance was for Mr. Lindvig 's half of
the purchase price.

On December 14, 1915, I wrote Mr. A. O. Lind-
vig:

vs. A. 0. Lindvig. -°>1

"We beg to hand you herewith copy of tele-
grams exchanged in connection with the 6000 ton
steamer we now contracted with the United En-
gineering Works of this City. The price $450,-
000.00 was the lowest one obtainable and you may
rest assured we endeavored to get it reduced, but
on account of the steel being advanced and the
contractors only had a few days left on the option
of the material, it was impossible to get a lower
price, $15,000.00 is to be added to the price just
mentioned for wooden tween-deck and one 7 K. W.
electric set, wired throughout and installed. The
steamer wTill be practically a duplicate of the
'Sverre' with the following exceptions: —

" Forecastle to be subdivided for light wooden
bulkheads, so that the crew may be provided with
separate rooms to accommodate 2 in each on the
port side and the firemen similarly situated on the
starboard side. Double bottom to be arranged for
carrying fuel oil, which would necessitate extra
work to be done, or same as tank work. Stern
frame to be of cast steel. [28 — 5]

"It was proposed to build two ships, a duplicate
of the above named steamer, including wooden
'tween-decks and 7 K. W. electric sets for the sum
of $905,000.00, delivery of one ship in ten to twelve
months from date of acceptance and signing of the
formal contract and specifications. Delivery of
the second ship to be in 16 months from same date,
but the price and delivery of second ship was con-
ditionally however, to be United Engineering

32 C. Henry Smith

Works being about to obtain steel necessary under
the option they were holding.

"We regrel exceedingly that .your proposition
to accept the 2 steamers with delivery of the 2
steamers in 14 months, came a few hours too late
for acceptance here. The Company advised us a
couple of days ago that they were offered a con-
siderably higher price for a steamer of this type
with delivery in 12 months and asked us if we
would accept 16 months delivery with the reduc-
tion of $40,000.00, so it will be seen that we could
do nothing in regard to this other boat. We ad-
vised of course, that we would not accept any delay.

" Terms of payment to be one twelfth (1/12)
part of the total sum paid on signing of the con-
tract and the remaining 11/12 to be paid in equal
time payments; the final 1/12 to be paid on de-
livery of ship after a successful trial trip having
passed Lloyd's inspection and the United States
Steamboat Laws: —

"Payment to be specified, condition that the
contractor has expended an amount for material
and labor in proportion to the amount of payment.

" Should the contractor fail to complete the ship
in the time called for in the contract, a penalty
has been fixed at $250.00 per day for each working
day delayed. On the contrary, he is to receive
a bonus of $250.00 per day for each day delivery
is made before the specified time.

'The Company advised that the prints and
specifications have been sent to Lloyd's New York

vs. A. 0. Lindvig. 33

(Testimony of C. Henry Smith.)
City, for approval and we expect these to be re-
turned sometime next week when we shall have
them forwarded at once.

"The steel has been ordered and will be shipped
in the course of the mont?/; the drawings of the
machinery now being made.

"Under separate cover we are sending you
copies of the midship section, or the proposed mid-
ship section for Lloyd's approval.

"We are prepared to arrange for subscription
of stock in this steamer to the extent of $100,000.00,
as advised in the cables and we should therefore,
like to know at an early date the name of the Com-
pany [29 — 6] and how these subscriptions should
be made."

On December 3, 1915, Mr. Lindvig cabled me:
"Have just contracted two steamers three thou-
sand three hundred tons each four hundred fifty
thousand dollars including electric light and de-
livery within eight months consider same price
one six thousand tonner too much but inclined pay
four hundred thousand provided good specifica-
tions and delivery ten months."

On December 23, 1915, in my own name as the
principal, I entered into a contract with the United
Engineering Works for the construction of the
6000 ton vessel afterwards called the "Regulus."
I did this because my principal was a foreigner,
and the United Engineering Company wranted my
name on the contract. [30 — 7]

:>1 C. Henry Smith

"THIS AGREEMENT, made and entered into
this twenty-third (23) day of December, Nineteen
Hundred Fifteen (1915), at the City and county
of San Francisco, State of California, by and be-
tween 0. HENRY SMITH, INC. a corporation,
organized and existing under and by virtue of the
laws of the State of California, having its prin-
cipal place of business in the City and County of
San Francisco, in said State, (hereinafter called
Smith), and the UNITED ENGINEERING
WORKS, a corporation organized and existing
under and by virtue of the laws of the State of
California, having its principal place of business
in the City and County of San Francisco, in said
State, (hereinafter called United).

WITNESSETH.

That the parties of this agreement, for and in
consideration of the mutual covenants and prom-
ises on the part of each to the other herein con-
tained, have agreed, and hereby do agree, as
follows :

ONE. The said United Agrees to construct or
cause to be constructed, for the said Smith, a
Steam Vessel, in strict accordance with the signed
plans and specifications, which are hereto attached,
and made a part hereof.

TWO. The said Smith hereby agrees to pay to
said United for said vessel, at the times and in tHe
maimer hereinafter specified, the sum of FOUR
HUNDRED and FIFTY THOUSAND (450,000)
Dollars.

vs. A. 0. Lindvig. 35

THREE. It is expected that said vessel will be
ready for delivery in from ten to twelve months after
the date of the signing of this contract and specifica-
tions, but [31 — 8] in consideration of the agree-
ment herein contained on the part of the said Smith
to pay a like sum to said United for each and
every day before the expiration of said twelve
months that the said United is prepared to make
delivery in accordance with the terms of this con-
tract, the United agrees that, if it fail to complete
the said vessel within twelve months from said
date (unless delayed by reason of excepted causes
hereinafter mentioned, or of the non-payment by
the said Smith in the manner and at the times
herein provided of moneys due under the terms
of this contract) it will pay to the said Smith the
sum of Two Hundred and Fifty (250) Dollars for
each working day beyond said twelve months that
the said delivery is so delayed, and the said Smith
hereby agrees to pay to said United the sum of
Two Hundred and Fifty (250) Dollars for each
and every working day before the expiration of
said twelve months that the said United may
tender or offer the said vessel to said Smith in
accordance with the terms of this contract.

FOUR. The said Smith shall pay to the said
United the said sum of Four Hundred Fifty Thou-
sand (450,000) Dollars at the time and in the
manner following:

Thirty-seven Thousand Five Hundred (37,500)
Dollars on the signing of this contract; and the

36 C. Henry Smith

balance in equal payments of Thirty-seven Thou-
sand Five Hundred (37,500) Dollars at such times
as said Tinted shall exhibit to said Smith its daily
record of time and material applied to the con-
struction of the said vessel, showing an amount
so applied of Twenty-eight Thousand One Hun-
dred and Twenty-five (28,125) Dollars (excluding
therefrom all overhead expenses, superintendence
costs, and all profit), with the exception [32 — 9]
that the final payment of Thirty-seven Thousand
Five Hundred (37,500) Dollars shall be made after
a successful trial trip and the tender of delivery
of said vessel in accordance with the terms of this
contract.

All of said payments, on account of the Four
Hundred and Fifty Thousand (450,000) Dollars,
shall, when made, be absolute, unless the United
shall, at its election sell the said vessel upon the
default of said Smith, in which event, the con-
ditions as set forth in the last paragraph of clause
Four of this contract shall be in force. The full
and complete payment of the said purchase price
shall be a condition precedent to any right on the
part of the said Smith to said Vessel, or any part
thereof.

Should the said Smith at any time fail to make
payment in the manner and at the times herein-
above provided, then the said United may stop
w^ork on said vessel until such payment is made,
and any delay so caused shall serve to extend for
a corresponding length of time the twelve months

vs. A. 0. Lindvig. 37

provided for the completion of said work, with
the obligations, neverless, on the part of the said
Smith to pay said Two Hundred Fifty (250)
Dollars per day additional for each day the said
work is delayed on said account.

Should, however, the said Smith continue in
default for any such payments for the period of
thirty (30) days, then said United shall be at
liberty to decline to further proceed with the
building of said ship for said Smith's account,
and all interest of every nature, whether legal or
equitable, of said Smith in said vessel, or the sums
paid thereon, shall cease and be at an end, subject,
however to the conditions of the last paragraph
of clause Four herein. [33 — 10]

If, however, the said United should dispose of
the said vessel by sale, after default on the part
of said Smith, it is agreed that in the event the
sum realized on said sale exceeds the contract price
of the said vessel as provided herein, then the
United will return to the said Smith a sum equal
to the amount paid by him to the United to the
date of the last payment by the said Smith, less
Two Hundred Fifty (250) Dollars per day for said
delay, as above provided. In the event that after
the sale of the said vessel by the United, the pro-
ceeds of the said sale, plus the sum already paid
to the said United by said Smith, total less than
the contract price, then the said Smith shall pay
to the said United a sum equal to the difference
between the said contract price and the total of

38 C. Henry Smith

Ehe sum of said proceeds of the sale and payments
said Smith to the date of his default.
FIYK. If while the said vessel is in the course
of construction the same shall be damaged by
reason of any of the exceptions hereinafter con-
tained, the said Smith shall pay for all extra work,
labor and materials necessary to repair such dam-
ge and to restore the vessel to the same condition
in which it was at the time of such accident or
other cause of damage, at the then market rate
for such material and labor, plus ten (10) per
t: but if said damage be so great as to render
it in the opinion of the United unprofitable for
said United to reconstruct said vessel, then the
United may abandon the further construction of
said vessel* In the event of damage as in this
article provided, whether the further construction
of said vessel be abandoned or repaired as herein
provided, the said United shall retain the moneys
paid on account and shall turn over to said Smith,
out of the net proceeds of any insurance that said
United may recover against such loss, such pro-
portion as may be fixed by the respective [34 — 11]
interests of such parties.

The insurance effected upon said vessel by the
United, shall be for full contract price and all
premiums are to be paid by said United.

SIX. The title to said vessel, and to each and
every part thereof shall be and remain in the said
United until complete and final payment of the
purchase price as herein provided, save that, in

. A. 0. Lindvig. 39

flie event of said United shall cease work on said
ssel for a period of Thirty (30) days for any
reason not enumerated in paragraph ''Eight'* and
not due to the default of the said Smith, then all
of the title to the said vessel, so far as constructed,
shall be transferred to the said Smith, and the said
United shall rent to the said Smith, for a reason-
able rental, all of its tools, yards, appliances and
equipments necessary to build the said Vessel, and
the said Smith may complete or procure the com-
pletion of the said vessel in such manner as he
chooses.

SEYEX. The said United agrees to deliver the
said vessel to the said Smith free and clear of all
Hens, and further agrees before the delivery of the
said vessel under this contract to have the same
inspected by Lloyd's Agent and by the United
States Steamboat Inspectors, and to have issued
to said steamer the proper Certificate of Inspection
giving said vessel under Lloyd's a classification of
100 A-l. and also a proper certificate under the
United States Steamboat Inspection Laws.

EIGHT. Acts of God, fire, earthquake, strikes,
lockouts or labor troubles of any nature, or any
accident whether of the same kind as those herein-
after enumerated or not. and not arising from
negligence of said L^nited. always throughout this
agreement excepted. [35 — 12]

NINE. Any dispute arising between the parties
hereto with respect to the question as to whether or
no the said work is being performed in accordance

40 C. Henry Smith

with the specifications, shall be referred to a board
of three (3) arbitrators at the port of San Fran-
cisco, for final decision, one to be appointed by the
United and the other to be appointed by the said
Smith and the third to be chosen by the two so
appointed.

IN WITNESS WHEREOF, said C. Henry Smith
Inc. and the said United Engineering Works, have
hereunto caused their names and corporate seals to
be hereto attached the day and year first hereinabove
written.

UNITED ENGINEERING WORKS,

By SAM J. EVA, President.

By R. W. CURTIS, Secretary.
C. HENRY SMITH, INC.,

By C. HENRY SMITH, Pres.

By . [36—13]

On January 13, 1916, I cabled Mr. A. 0. Lindvig:

"SIX THOUSAND TONNER SENDING
SPECIFICATIONS PLANS ALL APPROVE
BY LLOYDS OBTAIN LIST SPARE PARTS
STEAMER SVERRE WHEN BUILT AND
MAIL AT ONCE. WILL YOU SEND IN-
SPECTOR OR SHALL WE APPOINT ONE
HERE."

On January 14, 1916, 1 wrote to Mr. A. 0. Lindvig:

"In our telegram of yesterday we asked you to ob-
tain a list of spare parts which were supplied the
steamer 'Sverre' at the time she was built.

"The occasion for this request is that the United

vs. A. O. Lindvig. II

Engineering Works have submitted to us an offer
of $4,400.00 for a list of spares, as per enclosed copy.

"As we have insisted that there is hardly a freight
steamer being built in Great Britian that has not the
customary spares includes in the contract price, they
have agreed to the steamer 'Sverre,' as this boat was
given as the model in the specifications to a large
extent.

"In regard to the inspector for the boat during
the time when built, we would say that it would be
essentially necessary to have one here and we shall
appoint an inspector in San Francisco, or please ad-
vise us if you decide to send one out. We may say
that all steamers which are now being built in San
Francisco in various yards, have two or three in-
spectors on each boatfe, although all of those steam-
ers are being built according to the highest class of
Lloyds rules.

" Yours very truly,
"C. HENRY SMITH, INC.

"By C. HENRY SMITH.

"P. S. — In the contract with the United Engineer-
ing there was provided a 7 K. W. electric plant,
which was at the time thought large enough for light
and wireless. However, the engineer with whom we
went through the specifications in his opinion thought
this plant was not sufficient, and we have therefore
taken the liberty to arrange for a 10 K. W. set to be
installed in place of the plant as aforementioned,
with additional outlets and lights, at an additional
price of $350.00, of which we hope you will approve."

42 C. Henry Smith

(Testimony of C. Henry Smith.)

On February 11th, 1916 I wrote to Mr. A. 0. Lind-
vig:

" February 11, 1916.
"A. O. Lindvig, Esq.,

"Kirstiania, Norway.
"Dear Sir: [37—14]

"We telegraphed you on the 5th, asking you to
remit by telegraph $30,000.00 account of the steamer
now building at the United Engineering Works,
which we have received, and we shall render you ac-
count in due course.

'SINALOA.'

"The 'Sinaloa' arrived in Victoria on the 4th, in
the afternoon, so far as we have been able to ascer-
tain. We thought probably that the steamer had
been delayed on account of snow storms which have
been very prevalent in the north lately, as we had no
wire as to the arrival. The reason for this was that
all wires were down and we were unable to com-
municate with the agents up there, hence our cable
to that effect. We sent you, however, a cable on the
8th, stating that the steamer arrived O. K."

On February 19th, 1916, Mr, Lindvig wrote me:

"Kirstiania, 19th February, 1916.
"Messrs. C. Henry Smith, Inc.

"San Francisco.
"Dear Sirs:

NEW BUILDING 6000 TONNER.
"I beg to refer to your cable of 8/12 1915 — con-
tract six thousand tonner reading ten twelve months

vs. A. 0. Lindvig. 43

builders say however October delivery very likely
clean terms otherwise built highest class Lloyds Ve-
ritas and Norwegian Board of Trade also subject
American requirements — to which I replied — 6000
tonner accepted according exchanged telegrams.
In the specifications, however, I am surprised to find
that neither the Norwegian Veritas nor our Board
is mentioned. You will understand, I must have
the boat fitted out according to the Norwegian Board
of Trade requirements. I don't find the specifica-
tions satisfactory, and the contract is only made out
for the. benefit of the builders, so I am absolutely in
their hands, if any trouble or accident should happen.
I therefore cabled you on the 17th inst. — * general ar-
rangement plan 6000 tonner not received. Con-
tract not satisfactory. Section 3 contract fixed time
for delivery must be stipulated. Section five very
unsatisfactory, try exclude. Section six very un-
favorable must be altered builders must deliver
surety bonds for amounts paid as usual specifica-
tions hull and machinery not satisfactory posting ad-
ditional details.' Enclosed you will find my re-
marks about the contract as well as the specifica-
tions. I trust you will put these before the builders
and get a satisfactory arrangement. I never had a
contract yet, where no surety were placed by the
builders against payments made by the owners. I
trust you will look into this matter, and awaiting
your good news, I am,

"Your truly,

"A. LINDVIG.

44 C. Henry Smith

(Testimony of C. Henry Smith.)

"If no date of delivery stipulated owners will have
to pay $250 per day for time saved within the [38—
15] twelve months and this can according to para-
graph 3 amount to a considerable amount. If the
vessel is finished in 10 months $15,000. If these
terms cannot be altered to our satisfaction, I consider
it best to sell the contract. Please telegraph
result."

On February 23d, 1916, 1 wrote to Mr. A. O. Lind-
vig:
"A. O. Lindvig, Esq.,

"Kristiania, Norway.
"Dear Sir:

"We beg to enclose herewith receipt covering third
payment on the steamer building at the United En-
gineering Works.

"Referring to your cable dated the 18th, reading
as follows :

"' GENERAL ARRANGEMENT PLAN 6000
TONNER NOT RECEIVED STOP CONTRACT
NOT SATISFACTORY STOP SECTION
THREE CONTRACT FIXED TIME FOR DE-
LIVERY MUST BE STIPULATED STOP SEC-
TION FIVE VERY UNSATISFACTORY TRY
EXCLUDE STOP SECTION SIX VERY UN-
FAVORABLE MUST BE ALTERED STOP
BUILDERS MUST DELIVER SURETY BONDS
FOR AMOUNTS PAID AS USUAL STOP
SPECIFICATIONS HULL AND MACHINERY
NOT SATISFACTORY POSTING ADDI-
TIONAL DETAILS' which we have noted in every

vs. A. 0. Lindvig. 45

detail. In this connection beg to advise that the
United Engineering Works have sold out their plant
to the Union Iron Works. The Union Iron Works
is owned by the steel trust.

" Surety bonds for amounts paid on ships built in
this country are not customary, and we considered
the United Engineering Works able to complete and
carry out the contract, and now that the Union Iron
Works is behind the operating of this plant we would
consider a request of this character superfluous.
However, wTe are taking the matter up w7ith Mr.
Christy, formerly Manager of the United Engineer-
ing Works, and now in the employ of the Union Iron
Works, and I am to meet Mr. MacGregor, the Presi-
dent of the Company to-morrow, and Mr. Christy as-
sures me that he does not think there will be any
objection to changing the contract as you suggest.

"At the time we were cabling you on this contract
during the last days in November, you will recall
that we were quoted this price, owing to the fact
that the Company had an option on Steel, expiring
a few days later, or, we believe, the date was Decem-
ber 1. The price on steel advanced considerable
after that date, and we can inform you that a con-
tract has not been signed for a similar steamer with
17 months delivery at the price of $650,000.00. We
have been offered this steamer repeatedly by the
Union Works, but thought the price was perhaps a
little higher than the Company would like to go.

"The United Engineering Works at the time we
made the contract, or some days later, were negotiat-
ing [39 — 16] with the Union Iron Works with a

46 C. Henry Smith

view to sell their plant, of this we did not know at the
time, and we believe these people or the owners of the
United Engineering Works tried to get out of the
contract or get it cancelled in some way. We had
to see our Lawyers several time as the form of con-
tract they put before us was impractical and we
finally signed the form we sent you in order to avoid
delay.

"The point in this contract was of course if pay-
ments were not made, or delayed, it would delay for
the same time the construction of the vessel, and as
we did not think there would be any trouble regard-
ing the payments we signed the contract.

" However, the Union Iron Works have promised
to meet us in every way and as it is a very large
concern we can rely on it that the vessel will be com-
pleted on time.

"We have been promised delivery of the boat in
12 months as per contract.

"Your very truly,
"C. HENRY SMITH, INC.
By

On March 28th, 1916, I wrote Mr. A. O. Lindvig:

"March 28, 1916.
"A. 0. Lindvig, Esq.,

"Kristiania, Norway.
"Dear Sir:

"NEW BUILDING 6000 TONNER
"We are in receipt of your letters of February
19th, 22nd, and 28th, and also March 1st, and we have

vs. A. 0. IAndvig. 17

in reply thereto sent you telegrams as per copies
enclosed in to-day's mail.

"We are in receipt of a cablegram from you dated
March 25th stating that you were posting specifica-
tions and list of spare parts of the 'Sverre,' We
shall in reply say that we have of course contracted
for a steamer here along the lines of the 'Sverre'
and can only say that we will see that wre get such a
steamer, and we believe this will be satisfactory to
the owners.

"As to surety bonds we enquired at the time in
this City, when you brought the matter up, if such
bonds were customary on this coast and we were in-
formed that they were not with responsible builders.
At any rate at the time we were contracting for the
steamer you did not mention anything about surety
bonds. Had you done so we should of course got the
builders to pay for such bond, the cost of which is
$1,125. [40—17]

"The Union Iron Works Company is now building
23 large steamers, some of them for Norwegian ac-
count as stated, we believe for Jebsen of Bergen.
The contract for the two steamers were placed by
Henry Lund Company of this City for the aforemen-
tioned firm. There are no surety bonds for any of
the steamers building at the Union Iron Works Com-
pany, and we therefore believe it is only wasting
money for us to do so. At all events there is no
cause for excitement.

"As regards your specifications:

48 C. Henry Smith

"No. 1. The builders undertake to deliver a vessel
like the 'Sverre.' We beg to enclose copy of the
original agreement which explains itself.
Deck Erections: 'Tween-deck in holds. The
revised plans which we sent you a few days ago
show the 'tween-deck laid as agreed of 4" Or-
egon Pine bolted to the hold beams. We have
accepted these plans subject to specifications
and contract.
Doors: Tonnage openings will be provided in
the poop and in the after bulkhead of the bridge.

"3. Load Line: Will be given according to Nor-
wegian Rules. The free board mark will be ac-
cording to British Rules as specified.
Certificates: For Suez and Panama will be sup-
plied by the owners.
Bitts, Fairleads & Deck Fittings: Are larger

than usual.
Bulkhead: Will be submitted to Lloyd's local
surveyor for consideration. If acceptable to
them the Bulkhead will be left out and web
frame substituted. We have telegraphed you
in this respect so that we can make necessary
arrangements.

"4. Bunkers: There is a bunker on the port side.

"6. Cargo Battens: Are provided for.

Ceiling: Tank tops will be ceiled right over
therefore there will be no margin angle.

"7. Cementing: Noted.

"8. Double Bottom: Will be same as 'Sverre,' and
will be arranged for carrying oil. The tank

vs. A. 0. Lindvig. \u

tops will be doubled riveted. All [41 — 18]
other riveting about the tanks will be as cus-
tomary for carrying oil. Lloyds will permit oil
in double bottoms. Filling and suction ar-
rangements will be made through suitable mani-
folds, as customary here. Method of access will
be suitable to Llyods as all pipe connections will
be.

The double bottom vent pipes will be as large
as the filling pipes, which are usually 3V2" into
each section of the double bottom.

"9. Fresh Water Tank: Will be cement washed.

1 ' 10. Hatches : 12' 6" x 17' 0". Hatch will be in ship.

"11. Position of accommodation Ladder: Does this
mean ladder or ladders from main deck to the
bridge deck. In the completed plans all such
things will be indicated.

"14. Size of Bunks noted.

"15. Tunnel: Propellor shaft will draw into hold
without removing tunnel top plates.

"16. Ventilators to holds will be 18". There is a
ventilator at the further end of each tunnel.
Bunkers will be ventilated.
Winches: Steam pipes and valves will stand more
than 130 pounds. Exhaust is lead to main con-
denser. Each Winch will have a separate valve.
Windlass: Will exhaust on each side of the vessel.

"18. Boats: Captain Rustad will supervise the
equipment. Iron deck fittings will be gal-
vanized. Sanitary salt water tanks, etc., will
be provided, to be pumped up from engine room.

50 (7. Henry Smith

Hospital is not provided for in the specification
but will receive attention.

Other items under this number will be as re-
quested.

ENGINE SPECIFICATIONS.

Page

"3. Contractor will alter for additional compensa-
tion. [42—19]
Page.

"5. Provided.
"6. Provided.
"7. Provided.
"7. Provided.
"8. Provided.

Armoured hose not provided here.
Metallic packing provided.
"9. Provided for.

Lubrication Suitable lubricator will be pro-
vided.
"10. Pipe arrangement not yet made. Observa-
tions noted in connection therewith.
"11. Boiler covering will be on the backs of the
boilers.
Concerning evaporator, spare propeller, pro-
peller shaft, etc., or must be guided by the
"Sverre" equipment.
The electric plant will be complete, covering
all points mentioned.
15. Items referred to in specifications will be
shown in the plans as things progress, as
usual.

vs. A. O. Lindvig. 51

Note. — Contractors undertake to deliver a
vessel like the 'Sverre.'
"As to time of delivery we can only refer to the
cables exchanged at the time of contracting, when
we stated ten to twelve months delivery. The
builders undertook to, deliver the vessel in twelve
months and pay a penalty of $250.00 per day for
every day thereafter, in case that steamer is not
delivered. In case of delivery before expiration of
this time, we to pay them $250.00 per day. Should
the steamer be delivered in November, which wq
have been informed, however, will not be the case,
as the builders have informed us that they will de-
liver on time, as per contract, but, should they de-
liver before this time, we do not see how any loss
can occur, as the steamer should be well able to
earn considerably more than $250.00 per day.

"We shall send you details and plan of the
[43 — 20] fittings, etc., as soon as we receive them
from the builders, and also other details as required.
"Yours very truly,
"C. HENRY SMITH, INC.,

"By .

"CHS/B.

"EEC.

"P. S. — According to enclosed confirmation the
builders are to deliver steamer also to Norwegian
Board of Trade requirements."

On February 22, 1916, Mr. Lindvig wrote me:
"Your favours of 14th, 19th, and 20th 1. m. to
hand and contents carefully noted. In regard for

52 C. Henry Smith

(Testimony of C. Henry Smith.)
inspector for the boat during the time when built, I
should think, that our Captain Rustad (as men-
tioned before) together with Lloyds representative
would be enough and quite satisfactory to the own-
ers. I have never heard of two or three inspectors
on one boat. I note in the contract with the United
Engineering a 7 K. W. electric plant was provided.
I quite agree with your engineer that 10 K. W.
plant should be installed for the additional price of
$350. I note the price asked for additional spare
gear amounting to $4400. I have never had a con-
tract yet, where not spare propeller etc. as men-
tioned in your favor of the 10th 1 m. were supplied
by the builders, without extra charges, and trust
you will look into this matter. Our agreement is
spare ports as s/s 'SVERRE,' and this I think
ought to be sufficient, as most of the above spare
ports are mentioned in this steamers contract. I
note you say the new hull scantlings will weigh
some fifty tons more than the 'Sverre.' I do not
quite understand the meaning of this. Sure this
will have nothing to do with the deadweight capac-
ity of the steamer as she is contracted to carry 6000
tons in which hull scantlings and wood 'tween decks
should be excluded.

"I trust that the United Engineering will work
out the lines of the steamer, so that she gives satis-
factory speed, dead-weight and suitable freeboard.' '
On December 21, 1915, Mr. Lindvig wrote me:
"6000 tons vessel. I have decided not to let this
vessel go into the 'BAJA CALIFORNIA' company,

vs. A. O. Lmdvig. 53

(Testimony of C. Henry Smith.)
but to form a new company, which I have thought
of naming the joint stock company * PACIFIC I en-
close copy of subscription [-14 — 21] circular, from
which you will note, that the joint-capital is placed
at Kr. 850,000 — as a mortgage loan will be raised
for the rest of the purchase price. The value of
the shares will be Kr. 5000. each. Up to the present
has been subscribed Kr. 635,000, and I have there-
fore for the present reserved for you an amount of
up to Kr. 200,000, and will be obliged for your
telegraphic reply upon receipt hereof, if you are
considered included herewith. The money, as you
will see, is to be paid with 10% on the 15th of each
month figured from and including January 15th,
1916. For the present I have asked you to pay the
first installment and in order to avoid the heavy
expense connected with telegraphing the money, I
will be thankful to you. If you will until further
pay installments due, and I will after new year
send you by letter a large remittance on account.
Likewise you can then in future retain remittances
per 'BAJA C and 'SINALOA' and by telegraph
advise me, that same have been collected, where-
upon transfer will take place here at current rate
of exchange." [45 — 22]

Q. Now, Mr. Smith, he speaks here of the fact
that the capital is placed at 850,000 crowns and he
has reserved for you an amount up to 200,000
crowns. How much is 200,000 crowns in our
money ?

54 C. Henry Smith

(Testimony of C. Henry Smith.)

A. A 1 tout $54,000.00 — at that time it would be
$54,000.

Q. You have stated in your telegram to him, that
yen would subscribe $100,000. A. Yes.

Q. But he did not reserve but about $54,000.00 to
you? A. Yes.

Q. Now, on January 11, 1916, did you send Mr.
Lindvig a cablegram of which this is a copy?

Mr. FRANK. — The same objection, immaterial;
it has nothing to do with this transaction.

The COURT.— The objection is sustained Mr.
Moore ; it is wholly immaterial now.

The Court thereupon sustained said objection, to
which ruling counsel for the defendant duly ex-
cepted, and said exception is here specified and
designated :

EXCEPTION No. ONE.

The cablegram of January 11, 1916, from the
defendant to the plaintiff, and which was referred
to in the question, to which the objection was sus-
tained read:

"Statsraad Lindvig,

"Kristiania (Norway).
"STOCK ACCEPTED LETTER TWENTY
FIRST DECEMBER SINALOA SAILED
TWENTYPOXJE HUNDRED THIRTY TONS.

' < SMITH." [46—23]
The defendant then offered the following cable-
grams received by him from the plaintiff:

' 'January 19, 1916.
"If vou don't wish to overtake full amount two

vs. A. 0. Lindvig. 55

(Testimony of C. Henry Smith.)
hundred thousand Kroner Pacific, I can dispose of
about one hundred thousand here please tele-
graph.''

At the same time the defendant offered a cable-
gram by him to the plaintiff in reply to the fore-
going from Mr. Lindvig. This last-mentioned
cablegram read :

" January 19, 1916.

"Cannot give up any of two hundred thousand
Kroner stocks writing."

Counsel for the plaintiff thereupon objected to
the introduction of the above-mentioned telegram
as being immaterial.

The Court sustained said objection, to which
ruling the counsel for the defendant duly excepted,
and said exception is here designated.
EXCEPTION No. TWO.

The "Regulus" was built on the Oakland Estu-
ary, and I had to make a great many trips over
there, and it took up a great deal of my time.

"Q. Were you to be the agent of this 6000 ton
steamer when it was completed and turned over?

"A. Yes; that w7as understood. "

The COURT.— Q. Mr. Smith, this vessel was
subsequently completed, was it not? A. Yes.

Q. And turned over to the owners? A. Yes.

Q. And accepted by them. A. Yes. [47 — 24]

Q. I suppose in your statement with the owners
you put in this charge that you have got in here
for your services? A. Yes.

56 C. Henry Smith

(Testimony of C. Henry Smith.)

Q. When did you do that?

A. That was done after the vessel was delivered
and accepted by the owners.

Q. What date, if you remember?

A. In March or April, 1917.

Q. Was any objection made to your charge at
that time? A. Not at that time.

A Western Union night letter, dated San Fran-
cisco, March 8, 1917:

Defendant's Exhibit "JJ."

"United States Shipping Board,

"Munsey Building, Washington, D. C.
"In December nineteen fifteen a contract was
entered into between undersigned and United
Engineering Works for the construction and sale
of a steel steamer Regulus stop. Undersigned was
acting solely as agent for A. 0. Lindvig of Norway
who furnished the money for the purchase, the con-
tract having been made in his behalf and confirmed
by him stop. The ship is practically completed
and is advertised for sailing to South America on
Thursday next all cargo having been booked and
much of it having arrived in San Francisco ready
for shipment stop. Norwegian Counsel stands
ready to give Norwegian temporary registry stop.
Since ship owned by Norwegian and neither en-
rolled, licensed or registered American am advised
by consul that Shipping Act does not apply stop.
However, in order that no possible misunderstand-
ing later we hereby explain transaction stop.

vs. A. O. Lindvig. 57

(Testimony of C. Henry Smith.)
Simply desire to know that no objection by Board
to completion of contract by final payment to
builder by undersigned for Lindvig and delivery
to Lindvig of formal bill of sale so that vessel can
get away stop. Any delay beyond that time means
loss of more than two thousand dollars daily stop.
May we ask for reply at your earliest convenience.

"C. HENRY SMITH INC."

(The document was marked Defendant's Exhibit
"JJ.")

The next exhibit is a telegram from the United
States [48 — 25] Shipping Board to C. Henry Smith,
Inc., dated March 10, 1917, and was received here
on March 11 in San Francisco.

Defendant's Exhibit "KK"

"C. Henry Smith, Inc.,
"San Francisco, Calif.

"Have you owned any interest in ship Regulus
or has any other American person owned any in-
terest in said steamer since December Twenty Two
Nineteen Sixteen period was this contract in your
name originally, and assigned to A. O. Lindvig and
if so when was it assigned, or was it made out
originally in your name as agent for A. 0. Lindvig.

"UNITED STATES SHIPPING BOARD."

(The document was marked Defendant's Exhibit
"KK")

On March 12, I telegraphed:

58 C. Henry Smith

(Testimony of C. Henry Smith.)

Defendants Exhibit "LL."

"March 12, 1917.
"William Denman,

"Chairman United States Shipping Board,
"Munsey Bldg., Washington, D. C.

"Regulus contract made in our name stop. No
assignment has ever been made as we have always
acted as agent for Lindvig in the matter, hence
had nothing to assign stop. Out of $412,500 al-
ready paid shipyard Lindvig has paid directly by
cable or from his money on hand with us all but
$39,400 stop. We financed this $39,400 for him
and he is to repay us in stock of a proposed Nor-
wegian corporation which we understand is ulti-
mately to take over the ship stop. We have never
received any stock and look simply to Lindvig for
repayment in case corporation does not take ship
stop. This is only possible American interest we
know of stop. All payments of Lindvig but one of
$37,500. Made prior to December 1916 Stop Freight
rapidly coming into port matter extremely urgent.
"C. HENRY SMITH, INC."

(The telegram wTas marked Defendant's Exhibit
"LL.")

Q. The stock that these friends of yours sub-
scribed for, and the three shares that you got had
not been received by you at this time? A. No.

Q. Do you know whether the corporation had
been formed at that time?

A. I don't know. [49—26]

vs. A. 0. Lindvig. 59

Mr. MOORE. — Next is a message to C. Eenry
Smith, Inc.", from the chairman of the United
States Shipping Board:

Defendant's Exhibit "MM."

"1917 Mar. 12 Washington, D. C.
"C. Henry Smith, Inc.,
"San Francisco, Calif.

"It will be necessary for us to have contract
made with yard before we can pass on your peti-
tion your status involves consideration of legal
questions which documents alone can solve. We
should also have copies of letters exchanged be-
tween yourselves and your Norwegian correspond-
ents to determine character of relationship to them.
Our suggestion is that you form a corporation
under laws of one of United States in which you
or your correspondents own all the stock and
operate vessel under American flag. There is
nothing now to prevent you making any voyage
under our flag which you could make under the
Norwegian. It is of course, possible that both
these countries may be drawn into hostilities, but
this is a matter of course for your own considera-
tion.

"DENMAN, Chairman."

(The document was marked Defendant's Exhibit
"MM.")

Next is a telegram from C. Henry Smith, Inc.?
to William Denman, Chairman, United States
Shipping Board, dated March 14, 1917, which
reads :

60 C. Henry Smith

Defendant's Exhibit "NN."

"Contract with yard etc., mailed last Friday stop
Mr. Thatcher of the firm Denman & Arnold here
now on the way to Washington and will arrive
Friday with additional documents to show our
status stop If the Board should refuse permit for
the transfer of the vessel to Norwegian flag, we
shall suggest to the owner that a corporation be
formed under one of the Laws of the United States
and operate the vessel under the American flag,
hut we have no authority to do so without his
consent.

"C. HENRY SMITH, INC."

(The document was marked Defendant's Exhibit
"NN.")

The next is a cablegram from Mr. Smith to Mr.
Lindvig reading as follows:

Defendants Exhibit "00."

"San Francisco, March 16, 1917.
"Statsraad Lindvig,

"Kristiania (Norway).
"United States Shipping Board is against trans-
fer Regulus Norwegian flag stop They take atti-
tude that [50 — 27] under paragraph six contract
with Union title of vessel remains with builders
until delivered stop Vessel will deliver next week
delayed account strike stop Eleventh payment
made stop Shipping Board indicate they will allow
transfer vessel to American corporation all stock
of which to be held by you and associates stop Rul-

vs. A. 0. Lindvig. 61

ins: as to whether Norwegian crew mav be em-
ployed expected in a few days stop In case you do
not wish to incorporate vessel I may stand as
owner of same stop According to ruling vessel
must first be offered for sale now to Shipping
Board stop Cannot say at present what they will
pay stop Would suggest vessel be operated Amer-
ican flag until such time as she may be transferred
or to sell her in few months if so desired stop. At
time contract made it was in our name for protec-
tion of same.

"SMITH."

(The document was marked Defendant's Exhibit
"00.")

Next is a copy of a letter sent by Mr. Smith:

Defendant's Exhibit "PP."

"March 29, 1917.
"United States Shipping Board,

"Munsey Building, Washington, D. C.
"By night letter sent today, we enter into formal
agreement referred to in your wire of today.
Stop. Kindly notify Collector of Port as soon as
possible that transfer of Regulus to Lindvig and
registry under Norwegian flag now proper, so that
we can being loading immediately. Thanking you
for your courtesy in this matter,

"C. HENRY SMITH INC."
(The document was marked Defendant's Exhibit
"PP.")

Then enclosed in that letter is a night letter:

62 G. Henry Smith

" March 29, 1917.
" United States Shipping Board,

"Munsey Building, Washington, 1). C.

"In consideration of the United States Shipping
Board having waived any and all right to purchase,
under section Nine of the United States Shipping
Act of September seven, nineteen sixteen, the
steamer Regulus, now in the port of San Francisco,
California, and having also granted and approved
the sale and transfer of said steamer to A. O. Iind-
vig of Christian, Norway, said A. O. Lindvig does
hereby agree with said United States Shipping
Board that said steamer Regulus will make three
consecutive round trip voyages from said San
Francisco or from other American port or ports on
the Pacific Coast of North America, to port or
ports on the West coast of South America, and
that the first of said round trip voyage [51 — 28]
will be commenced within twenty-one days from
date.

"A. 0. LINDVIG.
"By C. HENRY SMITH, INC., Agent,"

"We guarantee that the above agreement will be
carried out by the Regulus.

"C. HENRY SMITH INC."

Next, the Shipping Board wires, under date of
March 29, 1917:

Defendants Exhibit "QQ."

"C. Henry Smith, Inc.,
"San Francisco, Cal.
"In consideration of owner of Regulus enter-

vs. A. O. Lindvig. 63

ing in agreement offered in your telegram of

March twenty-eighth Shipping Hoard waives any
right it may have to purchase Regulus under pro-
visions sections nine shipping act prepare agree-
ment and forward same to board. Board looks to
your personal assurance of its performance as
much as to terms of contract.

"SHIPPING BOARD."
(The document was marked Defendant's Exhibit

"QQ.")

Then on the same day I sent two cablegrams to
Mr. Lindvig. The first reads:

Defendant's Exhibit "RR."

"San Francisco, 3/29-17.
"Statsraad Lindvig,

"Kristiania (Norway)
"Except favorable decision transfer Regulus
Norwegian Flag."

"SMITH."
(The cablegram was marked Defendant's Exhibit
"RR.")

And the second cablegram sent evidently later in
the day reads:

Defendant's Exhibit "SS."

"March 29, 1917.
"Statsraad Lindvig

"Kristiania (Norway)
"Permit transferring Regulus Norwegian Flag
obtained stop Condition on making three more
voyages to Chile stop Steamer will be fully com-

64 (7. Henry Smith

pleted Saturday stop Commence loading Monday
stop Vessel satisfactory trial trip eleven knots
speed attained.

"SMITH.*;

(The cablegram was marked Defendant's Ex-
hibit "SS,") [52—29]

The following is a letter written by me to Mr.
Lindvig on June 1, 1917, which also contains a state-
ment of account between me and Lindvig, dated
June 1st, 1917:

"June 1,1917.
"A. O. Lindvig, Esq.,

"Kristiania, Norway.
" Dear Sir:

" Herewith please find General Account to cover
miscellaneous expenses and the transferred balances
of S. S. 'Sinaloa,' V-8, and S. S. 'Regulus,' V-I.

"As per your favor of February 28th, 1917, call-
ing our attention to an over change of $68.69, we have
checked over our account and find that this was
erroneously charged to you ; we therefore are credi-
ting you with this amount.

" We are also enclosing duplicate copy of bill from
Haller-Cunningham Electric Co., which amounts to
$700.00. This is the voucher that was short on
Statement No. 12, of the S. S. 'Sinaloa' account.

"The balance of 30 per cent., account shares of
1 Pacific,' is credited to you in this account at the ex-
change of 27/5/6.

"The dividends on the 'Baja California' stock has
been debited to you in this account amounting to
$15,698.00.

vs. A. 0. Lindvig. 65

"The credit balance due you amounting to
$24,138.36, was placed to your credit in the First
National Bank.

"Trusting that you will find the above mentioned
account in order, we beg to remain,

"Tours very truly,
" C. HENRY SMITH. ' ' [53—30]

Defendant's Exhibit "VV."

"San Francisco, U. S. A., June 1, 1917.
"A. 0. Lindvig,

"Kristiania, Norway.

"In Account with C. HENRY SMITH INC.,
"Steamship Agents and Brokers,
"311 California Street.

Dr. Cr.

1917. 1917.

Mar. 15. Postal Telegraph Balance $7,433.24

Co $ 47.39

27. Western Union Apr. 10. Alberto Scott

Tele, a/c Tele. a/c Sale of

for March... 100.09 Mnfst 9.20

29. 60% Dividends Wilcox Peck &

on Kupon #6 Hughes a/c

Certificate Refund 83.05

#287 to 302,

305 to 316-

318 to 323, Balance "Sina-

325 to 327-348 ^ V-8 a/c. .41,699.41

to 353, 897 to

935-941 to 952 Balance "Regu-

Kupons @ 167 . 15,698.00 W V-l a/c . . 53,319.92

Sundries Tele.— Advance a/c

Jan 105.20 Mrs. Petra

Smith 200.00

C. II < nry Smith

Testimony of C. Benry Smith.)

Dr.

Cr.

3.
16.

- Pub. _ .00

:inoll ft Davis 46.00
le Pub. 1 35.00

"ALTA" Ins. @

30 a/c _ .

1.200.00

Krns. (<:

May

Com'l News Pub.

First Nat. Bank

Deposit

20.00
75,000.00

5/6

-ALTA- In~. .

To credit items
charged twice
see 'BA.TA-

16,700.00
607.50

Apr.

12.

Metropolitan
Press

Western Union
Tele. Co

58.50
52.47

C ALIFORM. V
State. #27 .

68.69

Remuneration a/e

Building S. S.

"REGULUS"

6.000.00

Balance Due

A. O. Lindvig.

24,138.36

121,321.01

121.321.01

(The account was marked Defendant's Exhibit
"W.") [54—31]

Q. (Mr. MOORE.) I draw your attention to the
item there (referring to the account of June 1,1917),
remuneration acount building S. S. "Regulus,"
O0.00. A. Yes. sir.

The COURT.— What is the date of that account.
Mr. Moon

Mr. MOORE.— June 1, 1917.

Q. The "Regulus" was actually completed the last
of March, or rather, she sailed in the middle of April,
did sh( A. Yes, bit.

Q. Hn\v was it that this account contains items in
April and May and that this item for remuneration,
account of building of "Regulus" did not appear
until you made up your June statement i

vs. A. 0. Lindvig.

(Testimony of C. Henry Smith.)

A. "Well, because we did not have the time. We
did not have all of the vouchers in.

The "Regulus" made her first outward voyage in
April, and all the vouchers were in and the account
closed by June 1, 1917. In my statement of accounts
with Mr. Lindvig, dated June 1, 1917, I included the
following items: "Remuneration account building
steamship ' Regulus,' $6.000.00. "

Next a letter from Mr. Smith to Mr. Lindvig,
dated April 24, 1917. reading:

Defendant's Exhibit "TT."

"A. O. Lindvig, Esq.,

"Kristiania, Norway.
"Dear Sir:
"6000 TOXXER-SEPTEMBER DELIVERY.— "

Q. In the meantime you had contracted for another
boat from the l^nion Iron Works, which was after-
wards known as the "Romulus" ! A. Yes.
[55—32]

Q. And that is what this 6000 delivery refers to !

A. Yes.

Mr. MOORE.— (Reading:)

"In reply to your favor of the 17th Feb. we
have sent you the receipt for the 875.562.50 with our
letter of the 5th inst.

"As to delivery of this vessel, we are in close touch
with the Union Iron Works Co.. who intimate that
delay is unavoidable owing to the fact that the
material is not coming forward as anticipated. The
Government is asking all shipbuilders to put all

68 C. Henry Smith

private work aside for the time being in so far as
they can do so, but we believe that this vessel will
give delivery some time in October or November.
The keel is expected to be laid some time in June or
July.

"We took the liberty to telegraph you about the
stock in this vessel, as we asked you at the time the
contract was made to reserve isuch shares in the
amount of $50,000., and we shall be glad to learn how
same is payable. We are now in receipt of a cable
from you saying that the stock is not for sale as yet
and asking us if we recommend that the ship be sold
at the present time and to state eventual price. In-
asmuch as it is our understanding that the vessel is
being built for South American trade, it would of
course be unnecessary to add any extra work on same
if you prefer to sell. The <BAJA CALIFORNIA'
and the 'SINALOA' are rather small for Chilean
trade and if it is your wish to keep the service you
have inaugurated there, it will be necessary to have
two steamers of the size of the 'REGULUS': but
this of course is a matter for your own consideration.

"The 'REGULUS' we believe will prove a very
handy ship for this Coast business. She is a very
good carrier and being a very economical ship all
around, we believe she should prove an exceedingly
profitable investment for the stockholders.

"RATES: On flour, to Valpariso for instance we
are now quoting $17.00. We telegraphed you the
other day about a surcharge which wras proposed by
W. R. Grace & Co. to offset extra charges on account

vs. A. 0. Lindvig. G9

(Testimony of C. Henry Smith.)
of the war. Grace & Co. proposed a surcharge of
50% on the present rates, which we telegraphed you.
We, however, accertained that the surcharge was not
imposed by Grace & Co. and we therefore hesitated
to ask the shippers to pay same. Afterwards a rep-
resentative of Grace & Co. rang us up and said that
they would impose a surcharge of 25%, which they
thought was a fair and reasonable increase. We are
at the present time taking cargo subject to a sur-
charge being added to the rate given, and we shall
write you how this matter comes out.

"That a surcharge should be added we believe
firmly, on account of the higher rates for stevedor-
ing and also on account of oil having increased in
price, both here and down South. The oil contract
with the Standard Oil Co. covers only three steamers
at this pot, at 65^ per barrel. At the present time
oil is $1.25 per barrel. We thought it advisable to
leave [56—33] the "Governor FORBES" out-
side this contract, as she burns of course only half
of what the 'REGULUS' requires. The oil con-
tract at San Pedro covers all the steamers."

(The letter was marked Defendant's Exhibit

Q. That oil contract at San Pedro was with the
General Petroleum Company, was it not ? A. Yes.

Q. That also was for 65^ a barrels A. Yes.

Q. And extended until September, 1918?

A. Yes.

Under date of July 18, 1917, Mr. A. 0. Lindvig
wrote to me as follows, which letter was received

TO C. Henry Smith

by me October 15, 1917, and to which I replied Nov-
ember 8, 1917. Under the circumstances existing at
that time, it will take some three or four months for
a communication to reach its destination :

Plaintiff's Exhibit No, 10.

" Since writing you on the 12th inst. I have re-
ceived your favors of 1st (two) and 13th June
(three), contents of which are noted. I beg to en-
close a statement of cables exchanged.

"S. S. 'SINALOA.' I have no news since your
cable of 10th.

< < S. S. ' B A J A CALIFORNIA, ' Referring to the
statement of bookings you have sent, it appears that
the freight of $46,000 — 11th southbound voyage, does
not correspond to an increase in rates all round of
25%, in face the freight has not been increased even
by 10%, compared with the previous voyage, I have
talked over this with Captain Rustad, but he was
unable to give any explanation. The rate on flour,
for instance, is constantly figuring as $15. How am
I to explain this ?

"S. S. ' GOVERNOR FORBES' I am still with-
out any news re this vessel, since her arrival at Cor-
into about 27th June.

"Re the matter of supplies, I fully note what you
w^rite I have so far no letter from Captain Christi-
phersen, but it may become necessary to have speci-
fied the cases wThere you could have saved the ship
from $1000.— to $1500.— in order that I may [57—
34] put this before Captain Christophersen to obtain
his explanation. I expect that the ship-chandlers or

vs. A. O. Lindvig. 71

the dealers, to whom you have applied, are able to give
Signed statements, fixing approximately the prices at
that time, for the brands and qualities usually boughl .
I should then submit the same to Captain Christo-
phersen, in order to obtain his counter-statements.

" CONTRACT DUPONT. I await your further
news in reply to my cable of 10th inst.

"NEW BUILDING. You have evidently not re-
ceived my message of 12th inst, when dispatching
your cable of 15th ?

"I am glad to note that expected delivery in Octo-
ber November means that her position is much better
than that of other similar contracts.

?'Port Captain or Inspector. This matter is hav-
ing my attention and I may come back to same later
on.

"S. S. 'REGULUS'. The round trip will be taking
very long time, and I must hope that the arrange-
ments you are making for her next voyage, will bring
a better result. As you are contemplating sending
her to Valparaiso also next trip, I take it that you
have difficulty in obtaining sufficient cargo for the
other ports in Chile?

"Your statement of 1st June. As far as I can
see hitherto, there is no voucher concerning the item
1 Remuneration a/c Regulus $6000.' Please explain
same."

(The document was marked Plaintiff's Exhibit
No. 10.)

Under date of August 29, 1917, Mr. Lindvig wrote
to me as follows:

"I have now gone through your accounts en-

72 C. Henry Smith

closed in your letter of June 1st, and find same in
order with the exception of following items in the
general statement dated June 1st: Re balance from
of S/S 'Sinaloa' voyage 8 is transferred with the

amount of $41,699.41

While the statement says 40,611.99

Which makes a difference in your favor of $1,087.42

"The items $1200.— & $607.50 for insurance per
barkentine 'Alta' have already been credited me, in
statement 25 S/S 'Baja California' and statement
1 S/S ' Governor Forbes' respectively. The amounts
have therefore been credited you again, as the poli-
cies were not renewed. On the other hand I have
debited you premium on interest insurance as per
my letter of July 14th 1916, $84.90. This policy and
the hull policy were, however, prolongated until the
ship's arrival at nearest port of loading or discharg-
ing and as I learn from your telegram of 22nd inst.,
that she has arrived Melbourne, I debit you for the
[58-^35] premiums kr. 608.22 & kr. 41.82— $180.60.—

"I also debit you for remittance June 15th to
Mrs. Petra Smith $300.— and telegrams 1916-1917
account 'Alta' $70. The balance of these items
makes $2259.42 in your favor, which I hope you will
find correct and settle in your next account.

"As formerly told you, there was no voucher re-
warding remuneration a/c building SS. 'Regulus'
$6000.

"Copy of your statement two for S/S. c Governor
Forbes' has not yet come to hand, but I now hope
to receive it one of the first days.

I do not remember whether I sent a voucher for

vs. A. O. Lindvig. 73

the $6,000.00 as part of the remuneration building
of the steamship "Beguliis" with my statement of
June 1st, but I sent a voucher afterwards.

On November 8, 1917, I wrote to Mr. Lindvig the
following letter. I do not know whether he re-
ceived it in December or January.

Plaintiff's Exhibit No. 11.

" November 8, 1917.
"Mr. A. O. Lindvig,

"Kristiania, Norway.
"Dear Sir:

"I have just received your letter of July 18th
and contents noted.

"S.S. BAJA CALIFORNIA.

"Referring to statement of bookings which you
call attention to, would say that these bookings were
engaged before the increase of 25% took effect. In
the regular trade it is always, of course, necessary
to carry forward all contracts, whether there
is an increase or not, in the rate of freight. This
matter however has been fully explained to you
as I believe you telegraphed regarding same.

"SS. GOVERNOR FORBES."
"Regarding the prices for the supplies for this
vessel beg to advise that the men that you have
now in your office here, can give you these figures,
that you ask for, as they were attending to this
matter while employed by me. [59 — 36]

"STATEMENT FIRST OF JUNE.

"Regarding this voucher, we have sent you one
as far as I remember and it is for attending to con-

74 C. Henry Smith

tract, making payments and keeping books for this
vessel and also for protecting the contract.

" Yours very truly,

"CHS:MC. C. HENRY SMITH."

(The document was marked Plaintiff's Exhibit
11.)

Under date of May 31, 1917, the plaintiff wrote to
the Norwegian Legation at Washington, D. C, as
follows :

"Re transfer to Norwegian Flag. I hereby beg
to state that in August last year I contracted for a
' New building of about 6000 tons d. w., through my
agents at San Francisco, Messrs. C. Henry Smith
Inc. The time for delivery according contract is
September this year. Builders : Union Iron Works,
San Francisco.

"Two Months ago I took over a similar steamer
from the Union Iron Works, and she is now run-
ning under Norwegian flag in a regular trade, which
I started a couple of years ago on the W. C, i. e.
loading flour, wood & general merchandise at Frisco
and Northern ports for Peru and Chile and return-
ing with nitrate from Antofagasta (for account of
the large firm of Dupont), in which trade 4 of my
steamers are now engaged, viz.:

'Regulus,' About 6000 tons d.w.

'Baja California' " 2600 " "

'Sinaloa,' " 2600 " "

'Governor Forbes,' " 2500 " "

Considering the fact that I intend to maintain
the line, which I have started on the W. C. and for
which more tonnage is always wanted, and to employ

vs. A. O. Lxndvig. J5

the above mentioned new building in thai trade, I
consider it may be feasible to obtain in this case the
sanction of the American Authorities in as far as
the transfer to Norwegian flag is concerned. —

I believe that this Norwegian line of steamers, the
capital of which is partly subscribed by American
subjects is very well recognized on the W. C, and
I should very much esteem the kind assistance of
the Legation in this matter, in order to obtain a
favorable result. —

"Any other information, which may be desired,
can be had on applying to my agents at San Fran-
cisco, Messrs. C. Henry Smith, Ins." [60—37]

On July 14th, 1917, I wrote to Mr. Lindvig a
letter, which is as follows:

" ACCOUNTS.

"We beg to hand you herewith disbursement ac-
counts of the S.S. 'Baja California' V-ll, S.S.
i Governor Forbes' V-2, and also general account.
We are forwarding under separate cover, support-
ing vouchers, as we think under the conditions that
this is the best way to handle those accounts in case
of loss.

"S.S. * Governor Forbes': Owing to the extra high
cost of Stevedoring, Food Supplies, and also the
repairs and Fuel Oil, the expenses on this ship
were very high. We are endeavoring to adjust
these charges for the next trip.

"S.S. 'Baja California': Owing to the unsettled
labor condition and in order to give the ships good
dispatch, we have decided to do our own stevedoring

76 C. Henry Smith

(Testimony of C. Henry Smith.)
at Puget Sound, and about this matter we are writ-
ing you separately.

" General Account: You will note that we have
paid the second payment on Hull No. 154, amount-
ing to $75,562.50. We have therefore debited this
account and will credit same on receipt of remit-
tance from you.

" Trusting that these accounts will be found in
order, we beg to remain,

" Yours very truly,
"C. HENRY SMITH."

On July 16, 1917, I cabled the defendant:

"Have you decided regarding fifty thousand dol-
lar stock I asked you to reserve September last
year second new building stop Please let me have
the information now as it is of importance to me."

"SMITH."

On July 26, 1917, the defendant cabled me:

"No decision stock second Newbuilding but shall
probably keep the boat myself."

As a matter of fact, I never owned any stock, or
acquired any stock in the company that took over
hull one hundred and fifty-four, if any company
ever took her over. She was commandeered by
the Government in August, 1917, although I con-
tinued to co-operate in her construction, and give
such information and [61 — 38] assistance as was
in my power in connection with it. The vessel was
commandeered by the United States Shipping Board
under their letter, dated August 24, 1917, and I
continued to send cablegrams to Mr. Lindvig con-

vs. A. 0. TAndvig. 77

(Testimony of C. Henry Smith.)
cerning this matter during September, and to corre-
spond with the United States Shipping Board in
regard to it. In my account to Mr. Lindvig of
October 15, 1917, I included the following items :

" Office remuneration for handling contract Union
Iron Works account hull one hundred and fifty-
four, attending to payments and etc., ten thousand
dollars."

The "Regulus" was contracted in September,
1915, and completed on April 1, 1917.

Q. What was her market value at the time she
was completed, the "Regulus," on the first day of
April, 1917?

Mr. FRANK. — I object to it as immaterial.

The Court thereupon sustained said objection, to
which ruling counsel for defendant duly excepted,
and said exception is hereby designated
EXCEPTION No. THREE.

Q. What was the market value of the " Romulus"
at the time she was completed?

To this question counsel for plaintiff objected as
immaterial.

The Court thereupon sustained said objection
to the question, and to this ruling of the Court, the
defendant duly excepted ; and said exception is here
designated

EXCEPTION No. FOUR.

At the time that the " Regulus" was constructed,
I received from Mr. A. O. Lindvig a copy of his
report to the stockholders of the "Regulus," which
gives a statement as to her costs 31 and a statement

~8 C. Henry Smith

(Testimony of C. Henry Smith.)

of her operations for the year 1917 — April 1st, to

[62—39] December 31st.

It is admitted that this report is an exact copy
of the report received by Mr. Bjarne Lindvig, at
present the agent of A. O. Lindvig in San Fran-
cisco, and which was also received by Mr. Bjarne
Lindvig from Mr. A. O. Lindvig.

This report reads:

Defendant's Exhibit No. 50.
"REPORT FOR THE YEAR 1917 (4/1—12/31).

"The company ' Pacific' Limited, was established
at a meeting of November 23, 1916, with a capital
of Kr. 950,000.00 paid in full, in order to purchase
the contract for a 6000 ton steamer built at the
Union Iron Works, San Francisco, at a price of
$450,000.00, for delivery in December, 1916.

"As the ship was contracted for a single decker,
an additional sum had to be paid for furnishing a
tween-deck. Wireless telegraph as well as various
other extras, were also arranged for. The total cost
of the ship was Kr. 1,856,329.41.

"To cover the amount at a 5%% loan of Kr.
600,000.00 was obtained from the Soreke Skibs
Hypothenkbank for a mortgage on the ship. The
balance was covered by cash credit in Andresens
Bank a/s.

"The delivery of the ship was somewhat delayed
(partly on account of strikes), and it was not taken
over until April, 1917. The builders paid $10,000.00
as a compensation for the late delivery.

vs. A. 0. Lindvig. 79

"The ship, which was named the 'Regulus,1 im-
mediately commenced loading general merchandise
in San Francisco, bound for South American ports,
as far as Valparaiso. It brought back a lull cargo
of Nitrate, and has since been running regularly
between Puget Sound, San Francisco and South
America.

"The voyages have been made without any serious
accidents, and the ship has completed 2% round
trips during the three-quarters of a year it has been
running.

"C. Henry Smith acted as Agent in San Francisco
until October 1, 1917, when the A. O. Lindvig Com-
pany established their own office in the city.

"The freight rates southbound increased consider-
ably during the year, especially the last months;
for instance, the greight amount for southbound trip
in September, amounted to $147,000.00 against $178,-
000.00 in December, and there is, at the present
time, apparently no sign of a decrease in the rates.
[63—40]

"For the northbound voyages, the ship has been
on a contract for $13.75 per ton on nitrate to San
Francisco, with a small additional payment for dis-
charging up north. The contract will expire about
May, 1918, and thereafter we can expect a raise on
these rates also.

"A Dispute has unfortunately arisen with the
former agent, C. Henry Smith, as Mr. Smith with-
held about $52,000.00 of the collected freight, to
cover various commission charges, which we con-

80 C. Henry Smith

sider him absolutely not entitled to. The dispute
will probably be settled this summer.

"As shown by the following statement, the ship
has earned a total freight of Kr. 2,033,983.36, with
a. net profit of Kr. 1,096,420.32. After deducting
interest charges, registration fee, etc., the money at
disposal amounts to Kr. 1,012,346.65, which will be
disposed of as follows :

Written off on the ship Kr. 256,329.41

Eeserved for boiler & survey funds 100,000.00

Reserved for taxes for 1917 350,000.00

30% dividend to the shareholders 255,000.00

Carried into new account 51,017.24

Kr. 1,012,346.65

"The 30% dividend was given on January 2d, this
year.

"Due to the low exchange on dollars, the money
has not been transferred to Norway, but deposited
in a San Francisco bank. At the end of the year
this deposit amounted to $284,812.83. At the same
time we had debts in the Andresens Bank A/S,
amounting to Kr. 560,422.31. The mortgage has
been reduced with 5% viz: Kr. 30,000.

"The annual stockholders' meeting will take place
at my office Sjofartsbygningen, Thursday, April 25,
at 1:00 P. M.

"Kristiania, April 11, 1918.

"A. O. LINDVIG."

vs. A. 0. Lindvig. 81

(Testimony of C. Henry Smith.)

Cost of the S.S. "REGULUS."
Contract price $-450,000.00— Kr. 1,630,500.00.
Putting in 'tween-decks, various extras
and improvements outside the con-
tract—kr. 204,229.41 204,229.41

Commission for contracting the ship,

charged by C. Henry Smith $6000. . 21,600.00

1,856,329.41
[64-41]

(The document is here marked Defendant's Ex-
hibit 50.)

The commission charged by me for contracting
and supervising the construction of the "Regulus"
was 1^4 per cent of her contract price. This is a
reasonable charge.

I also charged a commission of 1^4 per cent of the
contract price of the "Romulus," known during
the time of her construction as Hull 154.

Between December, 1915, and September, 1916,
I obtained a number of options for Mr. A. O. Lind-
vig for the building of 6,000 ton vessels by various
yards here, and we finally came to the conclusion
of closing this contract for the construction of Hull
154, as the "Romulus" was called during the time
of her building. Both the "Romulus" and the
"Regulus" were built on the Oakland Estuary, and
I went over there a number of times and it oc-
cupied a great deal of my time. All of the time
that these vessels were building I had to go over
there and be in conference with the inspectors and

82 C. Henry Smith

to watch the specifications, so it took up a great
deal of my time.

On September 4, 1916, the plaintiff cabled me:

" 26000 September 1917 Union Iron Works sister-
ship ours We confirm purchase 7775000 dollars less
2% per cent division owners stop Penalty bonus
minimum $500 dollars per day clean terms. ' '

On September 5th I cabled the plaintiff through
the Trade Bureau at Kristiania:

" Inform Lindvig 6000 September 1917 confirmed
by Union Iron Works 775,000 less 2y2 per cent."

On September 15, 1916, as representing the plain-
tiff, I entered into the contract with the Union Iron
Works for the construction of Hull 154. [65 — 42]

AGREEMENT made this 5th day of September,
1916,

BETWEEN
the UNION IRON WORKS COMPANY, a cor-
poration organized and existing under the laws of
the State of New Jersey, party of the first part,
hereinafter called the "BUILDER"

AND
C. HENRY SMITH, INC., (as representing A. O.
LINDVIG of Christiania, Norway), party of the
second part, hereinafter called the "OWNER,"

WITNESSETH:

That the parties hereto, each in consideration of
the agreements of the other, agree as follows:

FIRST: The Builder agrees to build, equip and
deliver to the Owner a single screw cargo vessel,
in accordance with the specifications and drawings
signed by the parties hereto, which specifications and

vs. A. O. Lindvig. 83

drawings are to be taken as part of this contract,
as fully as though set forth herein at length; it
being understood that whatever may be necessary
to complete anything coming within the specifica-
tions although not particularly mentioned or al-
though imperfectly or insufficiently described there-
in, shall be supplied or furnished by the Builder
as if the same had been particularly specified; and
that all materials are to be the best of their re-
spective kinds and that all workmanship is to be
strictly first class and that both materials and work-
manship are to be in all respects such as shall be
approved by the representative of the Owner.

It is hereby understood and agreed that the
steamer herein contracted to be built shall be, as
nearly as possible, [66 — 43] a duplicate of the
steamer now under construction at the Alameda
Plant of the Builder for C. Henry Smith, Inc., and
knowTn as Hull No. 16; and the specifications and
drawings referred to above shall be similar to those
governing the construction of said Hull No. 16.

SECOND : Should the Owner at any time during
the progress of the work request any deviations
from said specifications and drawings, the same shall
be made, and shall in no way affect or make void the
contract; should such deviations involve addi-
tional expense, the amount of such additional ex-
pense shall be added to the contract price; should
the deviations reduce the expense, the difference
shall be deducted from the contract price. No new
work shall be considered as extra work unless so

84 C. Henry Smith

agreed in writing by the Builder and the Owner be-
fore the commencement thereof.

THIRD: Trial to determine the working of the
machinery and the speed of the steamer will be
made by and at the expense and risk of the Builder,
except as to fuel, which shall be furnished by the
Owner. Preliminary or dock trials under steam
are to be made to insure that the whole of the ma-
chinery, is in proper adjustment and working order;
the trial trip and other trials to be made in accord-
ance with the specifications.

FOURTH : The Builder binds itself to make good
all defective workmanship or material that may
develop within three months after the date of the
delivery of the steamer to the Owner, provided,
however, that in order to satisfy itself that such de-
fects arise from defective material or workmanship,
and not from mishandling, the Builder shall [67 —
44] be allowed to have a representative on board
the steamer who shall be acceptable to the Owner
and who shall have free access to all parts of the
steamer and its machinery. The Owner will pro-
vide said representative with free berth and meals
during the entire time he remains on the steamer.

FIFTH: The Builder engages, at its own risk and
cost, to deliver the steamer, safe and uninjured,
complete as herein stated, at San Francisco, Cali-
fornia, into the charge of the persons appointed
by the Owner to receive it, on or before the 30th day
of September, 1917; but due and reasonable allow-
ance is to be made for any unavoidable delays in
the completion of the steamer arising from devia-

vs. A. 0. Lindvig. 85

tions from the specifications requested in writing
by the Owner or from unfavorable weather prevent-
ing power speed trials, fires, accidents, strikes, acts
of God, or a public enemy, or other cause beyond
the control of the Builder. In the event of the
steamer not being so delivered wTithin said time, the
Builder agrees to pay to the Owner the sum of Five
Hundred Dollars ($500.00) as and by way of
liquidated damages, for every day beyond the date
named for delivery, until the actual delivery of the
steamer provided, that the delay shall not have re-
sulted from the causes aforesaid, in which case an
extension of time shall be made, such extension to
be mutually agreed upon between the Builder and
the representatives of the Owner. In case of de-
livery before the date aforesaid, the Owner will pay
a premium of Five Hundred Dollars ($500.00) for
each day between the delivery and such date.

SIXTH : The total purchase price to be paid for
said steamer, complete as herein agreed, shall be
Seven Hundred and Seventy-five Thousand Dollars
($775,000.00) in gold coin [68—45] of the United
States of America, and the Owner will make pay-
ments to the Builder at its office in the City and
County of San Francisco, California, as follows:

10% on execution of this contract

10% when keel laid

10% when framing started

10% when plating started

10% when vessel fully plated

10% when upper deck laid

10% when launched

86 C. Henry Smith

10' i when boiler in ship

107^ when dock trial is made

L0% on delivery of vessel,
provided that the Owner be shown to its satisfac-
tion, before making any of said payments, except
the first, that the Builder has discharged all in-
debtedness for labor and material employed upon or
used in connection with the building and equipment
of said steamer and that no lines upon said steamer
or material in favor of workmen, materialmen or
others are in existence. No partial payment, except
the first, to be made unless with the approval of the
representative of the Owner that the rate of
progress in the building of said steamer justifies
such partial payment. Payment for all extras, less
credits for any deductions, shall be made in cash
in like gold coin upon the completion and delivery
of the steamer. No partial payments made by the
Owner hereunder shall be evidence of performance
by the Builder, in whole or in part, and the making
of such partial payment shall in no way estop the
Owner from thereafter asserting any right or
remedy accruing to it because of failure of the
Builder to deliver the completed steamer in ac-
cordance with the terms hereof.

Should said steamer be completed and ready for
delivery, as called for in this contract and the plans
and specifications referred to herein, before Sep-
tember 30, 1917, then and in that event any balance
of the contract price. [69 — 46] remaining unpaid
at such time shall then become due and payable to-

vs. A. O. Lindvig. 87

gether with the final payment of $77,500.00 in the
foregoing schedule.

The title to said steamer and all materials ac-
quired to the Builder for use in connection with the
building of said steamer shall pass to and vest in the
Owner, whenever, and to the extent that, the same
shall be paid for as aforesaid. All risk of loss,
howTever, until actually delivered, shall be upon the
Builder.

At all times during the construction of the
steamer and until the same shall be finally delivered
to the Chvner, the Builder, shall at its own cost and
expense keep the said vessel insured against any
damage by fire, water, launching or accident of any
kind, in an amount at least equal to the partial
payments that shall have been made by the Owner,
the loss to the extent of such partial payments to be
payable to the Owner and the insurance policies to
be delivered to the Owner.

The Builder agrees to hold the Owner free and
harmless from any and all liability for any claims
for personal injuries or death resulting to any per-
son or employee, other than representatives of the
Owner, upon or about or in connection with the con-
struction and trial trips of said steamer.

SEVENTH: The Builder shall, at the completion
of the steamer, obtain and deliver to the Owner,
the builder's certificate of the steamer, wherein the
Owner shall be declared to be the party on whose
account the steamer has been built, and shall also
obtain and deliver such official papers as may be
required by the laws of the United States, and the

SS C. Henry Smith

Society in which the steamer is registered. [70 —

47]

EIGHTH: Any and every dispute or difference
which shall arise between the Builder and the Owner,
respecting their rights and obligations hereunder,
shall be settled by arbitration as follows: Either
party may by writing, delivered to the other party,
stale any such dispute or difference and name one ar-
bitrator to act in the settlement of the same; within
ten days the other party shall by writing delivered to
the party first acting in the matter, name a second
arbitrator; the two arbitrators so appointed shall,
within ten days after the appointment of the second
arbitrator, unless they agree as to the settlement of
the dispute or difference, appoint a third arbitrator.
The decision of two arbitrators shall be final and
binding on both parties. The method of hearing and
determining the matter in dispute shall be fixed by
the arbitrators or by any two of them. All the ex-
pense of said arbitration, including the compensa-
tion of the arbitrators, shall be paid as determined
by the arbitrators. Notwithstanding the existence
of any dispute or difference or the pendency of any
arbitration, the steamer, together with the Builder's
certificate, shall be delivered to the Owner whenever
the Owner shall require possession thereof and gives
written notice that it stands ready and willing to pay
to the Builder the balance of amount due under this
contract.

If, however, such dispute or difference involves any
claim by the Builder for additional compensation
from the Owner beyond the contract price, the Owner

vs. A. 0. Lmdvig. 89

shall pay such sum to the Builder prior to the de-
livery of the steamer, or shall secure the Builder
therein by good and sufficient surety bond pending
the decision of the arbitrators. Neither [71 — 48]
such payments nor the furnishing of such bond in
order to obtain possession of the steamer, nor ac-
ceptance of the steamer, shall in any respect pre-
judice the right of the Owner to recover damages for
failure of the Builder to deliver said steamer in ac-
cordance with the terms hereof.

NINTH: If during the progress of the work the
Builder at any time should become insolvent, or any
of its property should pass into the hands of a Re-
ceiver, or if it should unreasonably suspend work
upon said steamer, the Owner shall have the right to
enter upon the premises of the Builder and take pos-
session of said steamer, and thereafter cause it to be
completed in accordance with the terms hereof, at such
place or places as it may elect. If the cost of the
completion of said steamer, (including all expenses
connected with the taking of possession thereof) plus
all advances made to the Builder, shall be less than
the contract price, the difference shall be paid to the
Builder or its representatives; and, on the other
hand, the Builder shall be liable for any additional
cost to the Owner by reason of the taking possession
of the steamer and the completion of the work. The
right in this paragraph given shall be considered
cumulative, and shall not in any way limit any other
rights or remedies existing in favor of the Owner.

The Building guarantees that none of the devices
or anything used in or about the construction and

90 (• Hairy Smith

equipmenl of said steamer infringes any patents or
patent rights and agrees to indemnify and save harm-
Less the Owner From any suits, judgments or claims
whatsoever for infringements of any patent or patent
right; the Builder agreeing in the [72 — 40] event
of a suit being brought against the Owner, upon
notice being given to the Builder that it will have its
lawyers defend such suit without cost to the Owner.
IX WITNESS WHEREOF, the parties hereto
have hereunto caused their corporation names to be
hereunto subscribed and their corporate seals to be
affixed by their respective officers thereunto duly
authorized. Executed in duplicate.

union iron works company,
john a. McGregor,

President.
ARNOLD A. FOSTER,

Secretary.
C. HENRY SMITH INC.,
C. HENRY SMITH,
As Agents for A. 0. Ludwig. [73—50]
I cabled to Mr. Lindvig September 12th as follows :
"Statsraad Lindvig,

"Kristiania, (Norway).
" Governor Forbes' owners refuse to deliver here
will accept 340000 at Manila delivery 10 days after
approved transfer by Government 10 per cent pay-
ment on signing contract suggest vessel be accepted
six weeks after transfer instead if you wash to send
out officers etc. telegraph stop 30000 received contract
6000 tonner mailed today.

" SMITH."

vs. A. O. Lindvig. 91

Under date of September 12, 1916, I wrote the
plaintiff as follows :

"6000 tonner— Sept. 1917 delivery— Sistership
Hull 16, building Alameda Branch Union Iron
works Company.
"According to cables exchanged and your con-
firmation dated September 4th, reading as follows :

" '6000 September 1917 Union Iron Works
Sistership ours. We confirm purchase 775,000
dollars less 2~y2 per cent, division owners stop
Penalty bonus minimum 500 dollars per day
clean terms. '
"We have signed contract with the Union Iron
Works Company, which we are enclosing herewith
for the 6000 tonner which is in every respect sister-
ship of the other 6000 tonner building for your ac-
count, price $775,000.00 less 2y2 per cent, to the
owners, which we have arranged for with the
builders.

"We have also made a payment of 10 per cent, re-
ceipt for which please find enclosed, and have cred-
ited your account with $30,000.00 which we received
by cable today."

The "Romulus" was a sistership to the "Regulus,"
and the "Regulus" during construction was known
as Hull 16, but the contract price of the "Regulus"
was $450,000.00, while the contract price of the
"Romulus" was $775,000.00. The Difference in
these contract prices was due to the rising value of
materials during the interval.

On September 13-, 1916, I cabled Mr. Lindvig as to
Hull 154: [74—51]

92 C. Henry Smith

"New contract 6000 tonner eventually stock de-
sired about $50,000.00."
This was stock desired by me in the "Romulus."
Said cable further contains the following:
"Governor Forbes have telegraphed owners will
accept delivery at Manila six weeks after approved
transfer 10 per cent escrow money."

Under date of May 10, 1917, the plaintiff wrote me:
"New 6000 Tonner. According to the informa-
tion received here, through the Legation at Washing-
ton, from Solicitor Haight, it is presently difficult to
draw any conclusion as to how such tonnage will be
t reated by the American authorities. I expect it will
not make any difference, if I should at this stage de-
clare that I agree to sail her under American flag, or
if I should not trouble about this thing at all. Ac-
cording to the information you have given me, I con-
sider that it would in any case not be a difficult matter
to arrange the formalities to sail her under American
flag. In case you are able to obtain any information,
which may be of use to me, please communicate me
through the Legation at Washington. I consider it
is not impossible that transfer to Norwegian flag may
be ultimately be arranged, on the same terms — for
instance — as arranged for the 'Regulus' ."

In May, 1917, I found that there had been a de-
lay in delivery to the Union Iron Works of the plates
necessary for the construction of this vessel, and I
took the matter up with the United States Shipping-
Board, and succeeded in having the shipment of
plates expedited [75 — 52]

The following document was introduced in evi-

vs. A. O.Lindvig. 93

dence, having been produced by plaintiff on request
of defendant :

"July 3, 1918.
-UNITED STATES SHIPPING BOARD

TO
"A.O.LINDVIG,
"Kristiania, Norway,
"For disbursements, account building Hull No. 154,
known as SS. 'ROMULUS,' Commandeered by
the United States Government.
UNION IRON WORKS,

Payments on building contract $232,500.00

EDWARD S. HOUGH,

Services rendered, superintending

building ship 1,250.00

C. HENRY SMITH,

Cost of cables regarding building of
ship and contract, to and from Kris-

tiania, Norway 2,000.00

C. HENRY SMITH,

Remuneration for procuring and
handling contract, Union Iron
Works, attending to payments, etc. 10,000.00
C. HENRY SMITH,

Legal Fees, Postage stamps and in-
cidental expenses in connection with

building of ship 500 . 00

NATHAN H. FRANK,

Services rendered, matter of proposed

requisition of said vessel 800.00

A. O. LINDVIG,

Expenses of Inspector Hvoslef 1,876.50

$248,926.50

94 C. Henry Smith

Direct Examination of Defendant (Continued).

The accounts submitted by me to the plaintiff are
absolutely correct.

Mr. MOORE.— Q. Mr. Smith, I would ask you to
state what, if anything, you had to do with the pur-
chase for Mr. Lindvig of the "Governor Forbes"?

A. Well, I purchased the steamer and I took the
responsibility for inspection and classification that
she was as represented, and I delivered the steamer
[76—53] to him.

I purchased the "Governor Forbes "for $340,000.00
for Mr. Lindvig, charging him a commission of two
per cent, or $6800.00. I not only purchased the
steamer, but I took the responsibility for inspection
and classification that she was as represented, and she
was then at Manila, and I delivered the steamer here
in San Francisco, after arranging for the transfer
of her flag while she was at the Philippines.

On August 18, 1916, I cabled the plaintiff :
"Statsraad Lindvig,

"Kristiania (Norway)

"Governor Forbes offered firm 350,000 dollars
plus 2 per cent, commission prompt delivery now
Manila subject approval Government highest class
French Veritas wTill retain class four years. Vessel
well kept. Shall we accept. Cable.

"SMITH."

On September 7, 1916, the plaintiff cabled me :

"According your telegram 5/9 presume owners
Governor Forbes willing deliver steamer Frisco
350,000 dollars which preferable calculate her avail-

vs. A. 0. Lindvig. 95

' able there end October. Telegraph confirmation.

" LINDVIG."

On September 8, 1916, 1 cabled the plaintiff :
"Governor Forbes owners accepted price three
hundred forty thousand delivery Manila September
October subject approval Government transfer es-
crow money ten per cent, according your telegram
we have offered three hundred fifty thousand de-
livery here believe latter best arrangement as owners
cannot now guarantee transfer."

On September 12, 1916, I cabled the plaintiff :
"Governor Forbes owners refuse to deliver here
will accept 340,000 at Manila delivery 10 days after
approved transfer by Government 10 per cent pay-
ment on signing contract suggest vessel be accepted
six weeks after transfer instead if you wish to send
out officers etc., telegraph stop 30,000 received con-
tract 6000 tonner mailed today."

On September 13, 1916 I cabled to Mr. Lindvig, in
which the following occurs : [77 — 54]

"New Contract 6000 tonner eventually stock de-
sired about 50000 dollars."

This was stock desired by me in the Romulus.
Said cable further contains the following :
"Governor Forbes have telegraphed owners will
accept delivery at Manila six weeks after approved
transfer 10 per cent escrow money."

On September 15, 1916, I cabled the plaintiff:
"Governor Forbes owners accepted 340,000 dollars
payable as follows 10 per cent on closing of contract
to be held in escrow balance on delivery not exceeding

96 C. Henry Smith

six weeks after approval by government stop please
ivmit 30,000 by cable."

On September 15, 1916, the plaintiff cabled me:

11 'Governor Forbes' confirmed provided you ar-
range send crew lake steamer to Frisco will send
Captain and officers Frisco telegraph when transfer
and < iv\v older will then remit 10 pc also telegraph
how far work new building advanced."

On September 19, 1916, plaintiff cabled me.

"Ordered Andresens Bank remit thirty thousand
dollars account ' Governor Forbes.' " [78 — 55]

Defendant's Exhibit No. 4-G.

THIS AGREEMENT, Made this 19th day of Sep-
tember, 1916, by and between YNCHAUSTI Y CIA,
a copartnership, hereinafter sometimes termed
Seller (acting by its agent Welch & Company), party
of the first part, and A. O. LINDVIG, of Norway,
hereinafter sometimes termed Purchaser, (acting by
his agent C. Henry Smith, Incorporated), party of
the second part;

WHEREAS, Ynchausti y Cia, a copartnership, is
the sole owner of all and every part of the American
Steamer " Governor Forbes" and is desirous of sell-
ing said steamer to A. O. Lindvig ; and

WHEREAS, said Steamer is a steel vessel burning
coal as fuel, with double bottoms suitable for carry-
mi: oil as fuel;

\u\\, THEREFORE, THIS AGREEMENT
W IT\ ESSETH that in consideration of the sum of
Ten Dollars ($10.00) paid by the party of the second
part to party of the first part, receipt whereof is

vs. A. 0. Lindvig. 97

hereby acknowledged by party of the first part, and
in consideration of the grants, covenants and engage-
ments herein made, the parties hereto hereby do
covenant and agree, each to and with the other, as
follows, to wit:

1. The Seller agrees, for the consideration of
Three Hundred and Forty Thousand Dollars (340,-
000), gold coin of the United States of America, pay-
able as hereafter stated and upon the terms herein-
after stated, to sell, assign, transfer, convey and de-
liver unto the Purchaser, his nominee or assigns, by
good and indefeasible title, free and clear of all in-
cumbrances, indebtedness and liabilities of every
kind and nature, including all liens, whether actual
or contingent, and including all claims for average,,
the said Steamer " Governor Forbes," together with
all of her engines, boats, boilers, tackle, apparel, fur-
niture, equipment and appurtenances thereunto ap-
pertaining and belonging, on board or stowed on
shore in use or held as extras. [79 — 56]

2. Subject to his right of inspection and refusal
after inspection, as hereinafter set forth in para-
graph Nine (9) of this agreement, and subject to the
terms hereinafter stated, the Purchaser agrees to
purchase from the Seller the said Steamer " Gov-
ernor Forbes," together with all of her engines,
boats, boilers, tackle, apparel, furniture, equipment
and appurtenances, thereunto appertaining and be-
longing, on board or stowed on shore, in use or held
as extras, for the sum of Three Hundred and Forty
Thousand Dollars ($340,000) in gold coin of the
United States of America.

98 C. Henry Smith

3. The Seller guarantees that since July 15, 1914,
no German individual, firm or corporation has owned
any interest whatsoever in said Steamer.

4. The Seller, on or before October 10, 1916, is to
secure the consent necessary from any and all public
authorities to transfer and convey the entire interest
of every kind and nature in said Steamer to Pur-
chaser absolutely. Said consent, or a certified copy
of an order or letter giving said consent, shall be de-
posited with the Hongkong & Shanghai Banking
Corporation at Manila, P. I., immediately after said
consent is given. Notification that said consent has
been secured and delivered shall be given at the same
time by cable message to said C. Henry Smith, Incor-
porated, at San Francisco.

5. Within five (5) days after said consent is
granted, said Seller shall bring said Steamer to the
Port of Manila, P. I., and shall keep the same in
said port for at least five (5) days after notification
of the arrival of said Steamer at said port has been
given to C. Henry Smith, Incorporated, at San Fran-
cisco. During said five (5) days after said notifica-
tion said Purchaser by its agents, delegates, or sur-
veyors shall have the right, at any and all times, to
make full inspection of the condition of said Steamer.

6. Within five (5) days after said notification of
[80 — 57] arrival to C. Henry Smith, Incorporated,
Seller shall deposit with the Hongkong & Shanghai
Banking Corporation at Manila, P. I., a Bill of Sale
lawfully conveying the entire ownership of said
Steamer to Purchaser. Said Bill of Sale shall be
held by said Hongkong & Shanghai Banking Corpo-

vs. A. 0, Lindvig. 99

ration upon the terms and conditions hereinafter
stated.

7. Before the time that said Bill of Sale is de-
posited the Seller, by due meeting of its copart-
ners, shall have the conveyance of said Steamer to
Purchaser fully authorized and approved in a man-
ner satisfactory to attorney for Purchaser.

8. Purchaser, within five (5) days from the
date hereof, shall deposit with the Bank of Italy,
in San Francisco, California, Thirty-four Thou-
sand Dollars ($34,000), the same to be held upon
the terms and conditions hereinafter set forth.

9. In the event that the Purchaser, after the
said inspection set out in paragraph Five (5), is
not satisfied with the condition of said Steamer or
with the title of Seller to said Steamer or with the
legal effect of the said documents deposited with
the Hongkong & Shanghai Banking Corporation
by Seller, conveying title to said Steamer to Pur-
chaser, then the Purchaser, within five (5) days
after the period set out for the inspection of the
Steamer, shall notify by letter, telegram or cable,
the said Bank of Italy, the Hongkong & Shanghai
Banking Corporation at Manila, P. I., and Welch
& Company at San Francisco, that the Purchaser is
not satisfied with the condition of said ship or
with the title of Seller to said Steamer or with the
legal effect of the aforesaid documents, and that
Purchaser desires to terminate this agreement.
Upon said Notification to said three corporations,
this agreement and the effect thereof shall be abso-
lutely terminated. In case Purchaser does not so

100 C. Henry Smith

notify said three (3) corporations as aforesaid,
then or before the forty second (42nd) day after
the consent [81 — 58] mentioned herein in para-
graph four (4) hereof has been given and said
notification thereof cabled to said C. Henry Smith,
[ncorporated, Purchaser shall deposit with the said
Bank of Italy three Hundred and Six Thousand
Dollars ($306,000) in addition to the Thirty-four
Thousand Dollars ($34,000) previously deposited.
Said money shall be held for the purpose hereafter
set forth.

10. Upon the receipt of said Three Hundred
and Forty Thousand Dollars (340,000) in all from
the Purchaser as aforesaid, said Bank of Italy
shall, by cable, notify said Hongkong & Shanghai
Banking Corporation at Manila, P. I., that said
money has been received and that said Hongkong &
Shanghai Banking Corporation shall deliver to the
order of Purchaser possession of said Bill of Sale
and the other documents deposited with it as afore-
said. Said Hongkong & Shanghai Banking Corpo-
ration shall within five (5) days after said notifi-
cation of said deposit, hold said Bill of Sale and
said other documents to the order of Purchaser,
and the Seller shall, at the same time as said de-
livery of said documents is made, tender delivery
of said Steamer to the order of Purchaser at Man-
ila, P. I. Upon notification by cable from said
Hongkong & Shanghai Banking Corporation that
-aid Bill of Sale and other documents are held to
the order of Purchaser and that delivery of said
Steamer has been tendered to Purchaser, said

vs. A. 0. Lindvig. 101

Bank of Italy shall at once hold said Three Hun-
dred and Forty Thousand ($340,000) Dollars to
the order of Seller. At the time said Steamer is
delivered to Purchaser as aforesaid, it shall be in
fully as good condition as it now is, reasonable
wear and tear being excepted.

11. All moneys deposited in said Bank of Italy
by Purchaser shall be held by said Bank to the or-
der of Purchaser and may be withdrawn by Pur-
chaser :

(a) Immediately after this agreement is ter-
minated, as provided in paragraph nine (9) hereof.
[82—59]

(b) On or after December 10, 1916, if said
Bank of Italy has not by that time received notice
from said Hongkong & Shanghai Banking Corpo-
ration of the tender of said Steamer to Purchaser
as hereinbefore stated.

All documents deposited in said Hongkong &
Shanghai Banking Corporation by Seller shall be
held by said Bank to the order of Seller and may
be withdrawn by Seller:

(a) Immediately after this agreement is ter-
minated as provided in paragraph nine (9) hereof.

(b) On and after December 10, 1916, if said
Hongkong & Shanghai Banking Corporation has
not by that time received notice from said Bank of
Italy of the deposit in said latter Bank of Three
Hundred and Forty Thousand Dollars ($340,000)
in all by Seller, as hereinbefore provided.

12. All documents or papers deposited with
Hongkong & Shanghai Banking Corporation by

102 C. Henri} Smith

Seller in accordance with this agreement shall after
their deposit, be open to inspection at all times by
the Purchaser, his agent or attorneys.

13. Any action required to be taken herein by
Purchaser may be taken by said 0. Henry Smith,
Incorporated, acting for Purchaser with equal
effect; any action required to be taken herein by
seller may be taken by said Welch & Company act-
ing for Seller with equal effect.

14. Time is of the essence of this contract, and
if either party fails to comply with each of the
terms of this agreement within the times set our
for the performance of the conditions thereof, then
the other party may at its option declare this
agreement broken and refuse to perform any fur-
ther obligations on its part. Notification shall be
made by the party exercising said option to the
other party, and also to said C. Henry Smith, In-
corporated, said Welch & Company, said Bank of
Italy, and said [83 — 60] Hongkong & Shanghai
Banking Corporation. After said notification all
deposits of moneys or documents, made as provided
in this agreement, shall be at once returned to the
party giving such notification by the bank or other
corporation holding said deposits. This para-
graph shall not affect any right to damages for
breach of contract by one party to this agreement
against the other party.

15. This agreement shall be binding upon the
heirs, administrators, executors, assigns and suc-
cessors of the parties hereto.

vs. A. 0. Lindvig. 103

(Testimony of C. Henry Smith.)

IN WITNESS WHEREOF the parties hereto,
by their respective agents, have set their hands the
day and year first above written.

By WELCH & COMPANY,

Its Agents.
By ,

President.

Attest

Secretary.

By C. HENRY SMITH, INCORPORATED,

His Agent.
By ,

President.

Attest: ,

Secretary. [84 — 61]

(The document was marked Defendant's Exhibit
4-G.)

After the purchase there was a good deal of com-
plication in regard to the transfer of the vessel.
The lower court in the Philippines refused to
transfer the vessel, and we had to appeal the case
to the Supreme Court, and the Supreme Court held
that the transfer should be made. Then wTe ar-
ranged for the taking of the delivery of the vessel
and the payment for the vessel.

Q. What was the value of that vessel, the market
value here in San Francisco, at the time of her de-
livery here in 1917?

The COURT. — Your claimed compensation is on

104 C. Henry Smith

(Testimony of C. Henry Smith.)

the basis of a certain percentage, two per cent, is

ii I

Mr. MOORE.— Yes, sir.

The COURT.— On her purchase?

The WITNESS.— Yes, sir.

To this question counsel for the plaintiff ob-
jected as immaterial. The Court sustained said ob-
jection to the question, and to the ruling of the
Court sustaining said objection, the defendant then
and there duly excepted, and hereby designates
said exception as

EXCEPTION No. FIVE.

Q. Now, your charge in respect to the "Sinaloa"
salvage item is $3,165.27, and I want to take that
item up next.

Mr. FRANK. — We will have to object initially
to anything at all with reference to salving the
"Sinaloa" because the "Sinaloa" was one of the
vessels in the employ of the steamship line, and he
being in that employ at that time, it was a part of
his duty as general agent to take care of the ves-
sels. [85—62]

The COURT.— I will tell you what I think would
be the better way. I think you had best make to
the Court a brief statement of the character of the
evidence you propose to offer in support of this
item, and the Court will then pass upon that as a
statement — I mean pass upon the question then as
to whether or no under that statement it is within
or outside the lines of his contract.

Mr. MOORE. — I propose to show that on June

vs. A. O. Lindvig. 105

(Testimony of C. Henry Smith.)
14, 1917, the "Sinaloa" ran aground in a fog a
little south of Cape Blanco, and that on June 15th
Mr. Smith received a wire from the captain of the
vessel to that effect; that on the same day he, Mr.
Smith started a tug from Coos Bay, which was ex-
pected to arrive at the place where the vessel was
in four or five hours ; that he was further wired by
the captain that he must have assistance the ves-
sel was leaking badly, there was water in the after-
hold, and that Mr. Smith left that same night for
Cape Blanco with Captain Curtis of the Marine
Underwriters, going overland to Eureka, and from
there by boat north to the vessel at Cape Blanco;
that before arriving he wired the captain he was
sending men and cables and equipment ; and that on
July 11th, a barge was installed alongside the ves-
sel and all of the gear was received; that he facili-
tated the saving of the ship; that he had a great
deal of correspondence with the plaintiff in regard
to her, and what should be done wTith respect to her,
and in the adjustment upon her, and a great deal
of correspondence with the people doing the sal-
vaging operation; that there was a controversy as
to whether the vessel should be towed to Portland
or San Francisco; that the defendant insisted she
be towed to San Francisco ; and when there he sub-
mitted her to bids of the different ship building
companies; that there were three bids given
[86 — 63] for her repairs, the lowTest being by the
United Iron Works for $135,000.00 and the next
lowest being for $200,000.00; and that the United

106 C. Henry Smith

(Testimony of C. Henry Smith.)
lion Works did not want to do the job because
they were immediately afterward commandeered
by the Government; and that Mr. Smith then took
up the matter with the Shipping Board, and ob-
tained a permit from the Shipping Board provid-
ing for the repairing of the vessel by the United
Iron Works.

Mr. PRANK. — I have nothing to say excepting
that it is incompetent and immaterial, the state-
ment he has made.

The defendant then offered to introduce certain
cablegrams, stating :

"It is for the purpose of showing services ren-
dered by Mr. Smith in connection with the salvage
of the 'Sinaloa' amounting to some $2,000, which
represents 5% of the sum total of $60,000 that was
paid out. I want to state the purpose. That was
advanced by Mr. Smith, and showing the communi-
cations between himself and Mr. Lindvig during
the course of that time and the requests that were
made upon him by Mr. Lindvig, in the matter and
the appointments by Mr. Smith and the revocation
of the appointment by Mr. Lindvig as to the ap-
pointments made by Smith."

To all of which the plaintiff objected on the
ground that it was incompetent and immaterial.
(To the WITNESS.)

Mr. MOORE. — You have examined these cable-
grams? A. Yes, sir.

Q. Now, don't answer this unless the Court tells
you you may. I will ask you to state whether the fol-

vs. A. 0. Lindvig. 107

(Testimony of C. Henry Smith.)
lowing cablegrams were exchanged by you, between
you and Mr. Lindvig. You cabling to him upon
the subject of the "Sinaloa" and her then condi-
tion and what you were to do about it, and what he
wanted you to do. Did you cable to him on June
16th, 1917, as [87—64] follows:

"Sinaloa aground near Cape Blanco in fog this
morning have sent tug for assistance."

And again on June 17th, 1916.

"Alta sailed for Melbourne stop Sinaloa position
very difficult stop broadside to the beach stop
leaking stop ten feet water aft hold."

And did he cable you on June 19th, 1916?

"Wilcox Peck Hughes attending average Sina-
loa."

And again on June 20th:

"Urgent Wilcox cable chances floating Sinaloa
slight stop everything possible must be done to save
her."

And thereafter on June 20th, 1916, did you cable
him; and then he cabled you on June 22d?

"Kindly cable amount Sinaloa insured stop
Smith now at ship stop after hold flooded no water
forward stop discharging cargo onto barges."

"Steamer Sinaloa insured as follows seven hun-
dred thousand kroners hull three hundred thou-
sand hull interest hundred thousand freight inter-
est stop understand now prospects save ship stop
condemnation must be avoided if by any means
possible."

And you cabled him June 21st:

108 C. Henry Smith

(Testimony of C. Henry Smith.)

"Sinaloa appointed Johnson and Higgins adjust-
ers stop they are agents for Skuld."

And he cabled you on June 23d?

"Steamer Sinaloa you must adhere to my in-
structions appoint Wilcox Peek & Hughes who are
agents main hull underwriters stop should other-
wise have had no objection employ Johnson Hig-
gins/'

You cabled him on June 23d:

" Believe Sinaloa may be floated according to ex-
perts stop assembling fuel equipment to go north
stop vessel in a rather protected position during
summer."

You cabled him on June 29th:

" Please insure ocean going barge sent to Sinaloa
value fifteen thousand dollars." [88 — 65]

And he cabled you on July 2d:

" Covered hull insurance barge fifteen thousand
dollars two per cent voyage Frisco to steamer Sin-
aloa therefrom to Puget Sound or Frisco."

You cabled him on June 30th :

"Please place insurance salvage equipments sent
aboard Phoenix and ocean going barge to Sinaloa
valued at twenty-five thousand dollars."

He cabled you on July 3d:

"Steamer Sinaloa referring your cables 29/6 and
30/6 we have insured two barges and equipment in
all 40,000 dollars value is this correct,"

We will take a ruling on those cables.

Mr. FRANK.— We admit, of course, that those
cables passed between them. They may be set out

vs. A. 0. Lindvig. 109

(Testimony of C. Henry Smith.)

in the record so that the record may be perfect,

and we will make our objection on the grounds

stated.

The COURT. — Under the construction I put on
this contract that evidence is wholly immaterial.

The defendant duly excepted to the ruling of the
Court sustaining said objection, and said exception
is here designated.

EXCEPTION No. SIX.

The WITNESS-.— ( Continuing. ) I disbursed
$63,305.54 in the salvaging of the "Sinaloa."

The COURT. — You constantly had moneys of
the plaintiff here coming in, I suppose?

A. Yes, sir, I did, but we had large disburse-
ments, too.

Mr. MOORE. — Q. You had moneys on hand be-
longing to Lindvig at that time, did you?

A. Yes, sir, I had.

Q. And also what disbursements did you have,
or what calls were made for that money?

A. There were constant disbursements. We had
to pay the expenses at the Southern [89 — 66]
ports and the disbursements for the steamers all of
the time, and I was responsible for these disburse-
ments while I was agent.

Q. I will ask you to state whether or not you ar-
ranged where the vessel should be brought to when
she was taken away, or when she was floated.

Plaintiff's counsel objected to this question as
immaterial and the Court thereupon sustained said

110 C. Henry Smith

(Testimony of C. Henry Smith.)
objection, to which ruling counsel for defendant
duly excepted, and said exception is here desig-
nated.

EXCEPTION No. SEVEN.

I made application to the United States Ship-
ping Board at Washington in regard to a permit
being issued for the repair of the vessel by one of
the ship building yards here in San Francisco
Bay.

For the return voyages of these vessels from
South America, I as agent for plaintiff entered
into yearly contracts for the carriage by these ves-
sels of nitrate with the Dupont de Nemours. The
la st of these contracts entered into by me was
dated July 10, 1917.

Q. Now, Mr. Smith, Mr. Lindvig had a contract,
did he not, preceding this contract for the carriage
of nitrates with the Dupont, which expired on
June 1 1 A. Yes.

Q. You had no other contract with the Dupont
at that time for the carriage of nitrate over these
lines?

The COURT.— Yourself individually?

A. No.

Mr. FRANK.— Or otherwise?

A. No. This contract covered the carrying of
forty thousand tons during the year June 1, 1917,
to June 1, 1918. Before entering into this con-
tract the defendant cabled me to first obtain the
nt of the British Admiralty and meantime to
fix for only one voyage, but I considered such a

vs. A. 0. Lindvig. Ill

(Testimony of C. Henry Smith.)
course impracticable and unnecessary, [90 — 67]
and was so advised by W. A. Simonton, the Traffic
Manager for the DuPont de Nemours Company.
He said it would be a long time before the matter
could be taken up by our Government and the con-
sent of the British Admiralty secured, but that if
any trouble should be made, there would be no diffi-
culty about keeping the vessel on the run, inas-
much as they were carrying nitrate, to the Dupont
de Nemours Company, at San Francisco and at
Tacoma, which [91 — 68] nitrate was being used
in the manufacture of munitions of war.

I knew that the Government was advised of pre-
vious contract with the DuPont de Nemours Com-
pany, and favored a continuance of this business, and
it was on the strength of the "Regulus" engaging in
the carrying of this nitrate, that I was able to get
her transferred to the Norwegian flag in April, 1917.

On October 31, 1917, I wrote the following letter
to Captain P. Hvoslef :

Defendant's Exhibit No. 4-Z.

October 31, 1917.
Captain P. Hvoslef, Representing, A. O. Lindvig,
280 Battery St.,

"San Francisco, Calif.
"Dear Sir: —

"NITRATE CONTRACT.

"I hereby beg to inform you that I have charged
commission on the total amount of Nitrate to be lifted
under this contract, less what has already been car-

pet

1 12 C. Henry Smith

ried according to statements in the hands of Mr.
A. O. Lindvig, K ristiania, Norway, or on the way, of
which copies at your disposal. This charge will have
to stand, inasmuch as you have not acknowledged
that you intended to carry out the contract, and
therefore have placed me in an embarrassing position
towards the Dupont Company.

"I hereby beg to give notice that I require sixty
(60) days in order to make arrangements to take
over any portion of Nitrate which you are unable to
lift or which you wish to be relieved of, subject to,
of course, contingencies beyond control.

" Yours very truly."
(This letter was marked Defendant's Exhibit 4-Z.)
On October 6, 1917, I wrote the following letter
to Mr. A. O. Lindvig :

Defendant's Exhibit No. 5-A.

"Oct. 6, 1917.
"Mr. A. 0. Lindvig,

"Kristiania, Norway.
"Dear Sir:—
"DUPONT POWDER COMPANY. [92—69]
"Regarding your telegram to Mr. Hvoslef, that
I acted without any instructions in arranging same,
I must call your attention to my telegram of July
8th reading as follows : —

" ' Dupont will not consider three months con-
tract stop insist on yearly contract stop other-
wise business off and will employ their own
boats stop offer thirteen dollars seventy five cents
stop dollars 13.75 stop will assist toward our
Government and England if necessary.'

vs. A. 0. Lindvig. 113

"Also your reply thereto of July 10th as fol-
lows:

" 'Can only fix for one voyage at the time un-
less Dupont or American Government can get
British Admiraltys approval for a longer period
stop if this obtainable expect get our Govern-
ment agree telegraph.'
"Inasmuch as I obtained a promise from the Du-
pont Company to assist toward the American Gov-
ernment, I could not get any other meaning out of
the cables exchanged with you, that it would be satis-
factory to close the contract. I also must call your
attention to your letter of July 12th, in which you
say that you are sorry that you cannot give clean
authority to close the contract, meaning of course,
without any strings to it. I cannot understand it
any other way.

"All contracts will always be subject to the laws
and regulations of the Norweigian Government at
all times and the agreement is not binding upon you
if the Government says 'No.' Otherwise I am per-
sonally responsible for this agreement made with
Dupont Powder Company, and I shall carry it out
myself, if you do not. Inasmuch as many cables are
multilated wrhen they arrive here from yours and also
because the mail takes such a long time, it was im-
possible for me to go into further details.

"OPERATION OP SHIPS.

' ' I have now transferred this to your office, which
I have been informed is now established here. Mr.
Hvoslef called on me yesterday and I understand he
arrived from Norway a couple of days ago, and I

Ill C. Henry Smith

transferred to him the Oil contract I made in Sep-
tember, L915, for the SS. SINALOA AND BAJA-
CALIFORNIA, and any other steamers owned or
operated by me. This contract is on a basis of 65^
per barrel. In view of the market of today, $1.30
and ?fl.40, it is a good contract. I also transferred
the contract to him which I made with the Standard
Oil Company about four(4) years ago and which
expires the end of this year. You will understand
that I have had no request from you to close or to
make any contracts for fuel oil in your behalf. I
enclose a copy of the contract for your perusal.

"REGULUS STOCK.
" This stock arrived here last month and I delivered
[93 — 70] same to the United Engineering people.
My lawyer told me that I had a chance to win the
case against the United under the option; but that
being an American citizen it might be a question
whether I was a Norwegian interest, which is set
forth in the option. He told me furthermore that
you, yourself, being managing owner of the REGU-
LUS have exercised the option, but I decided that if
anyone was entitled to exercise such option, it was, of
course, me and if I could not do it, it was only just
that the United should have the stock. Therefore,
I did not take the matter up with you.

"ACCOUNTS.
"I have paid the Union Iron Works $135,000.00
on account of the repairs of the SINALOA which
will amount to, with extras and bonus, to about
$145,000.00. As soon as I receive the bills from the
Union Iron Works, I shall draw the remainder of the

vs. A. O. Lindvig. 115

credit, which you arranged with the First National
Bank to pay. The salvage money which I have paid
out amounts to about $60,000.00. I may say that it
was very fortunate for the steamer that we obtained
permission from the Government to have the repairs
made, as at that time the Union Iron Works was
taken over by the United States Government and the
Union people claimed that they were not obligated
to finish the contract. I have deposited what is due
you as per GOVERNOR FORBES AND BAJA
CALIFORNIA. Statements in the First National
Bank to your credit and as soon as we have the
accounts checked up for the SINALOA which sailed
from Seattle on September 26th, of which you have
been notified and also the General Statement and
Salvage Statement.

"Yours very truly.' '
(The letter was marked Defendant's Exhibit 5-A.)
On November 21, 1917, 1 wrote the following letter
to Mr. Lindvig:

Defendant's Exhibit No. 5-D.

"A. O. Lindvig, Esq., per B. Lindvig, Agent,
"280 Battery St.,

"San Francisco, Calif.
"Dear Sir: —

"Re: Commission for Procuring Dupont Contract.
"With regard to the item of October 12, $25,517.80
balance of commission for the contract to carry
40,000 tons of nitrate for the Dupont Powder Com-
pany, my understanding is that you are to carry the
balance of the nitrate under the terms of the con-

116 C. Henry Smith

(Testimony of C. Heniy Smith.)
tract. [94 — 71] Apparently you hesitated at first
under the impression that the contract was contrary
to Norwegian law. On examination, it appears that
ii does not purport to charter any ship and could be
performed in any vessels we might present and hence
offends no Norwegian law. Your ratification by
performing in part and by Mr. Hvoslef 's statements
we take to indicate your desire to perform the con-
tract. This point of view is confirmed by advices
from the Dupont Company.

"Very faithfully yours."

(The letter was marked Defendant's Exhibit 5-D.)

Mr. MOORE.— Q. Now, Mr. Smith, at the time
that you made that contract, did you know and appre-
ciate and believe that you would be responsible for
the carrying out of it in the event Mr. Lindvig did
not choose to do so?

Mr. FRANK. — I object to that as immaterial and
incompetent.

The COURT.— I think I will let him answer
that, I would like to know how he expected to carry
it out.

Mr. FRANK. — We take an exception.

A. Yes, I did.

Mr. MOORE.— Q. Now, to answer the Court's
question, how did you expect to carry it out if it was
up to you to do so, in the event Mr. Lindvig did not
want to?

A. I expected to get other vessels.

The COURT.— Q. Where would you get them,
under the conditions prevailing at that time?

vs. A. O. Lindvig. 117

(Testimony of C. Henry Smith.)

A. They were building a number of wooden ships
on the Coast, and I owned some ships myself.

Q. What were they ?

A. They were sailing ships, and I was negotiating
for auxiliary w^ooden ships at the time for the pur-
pose of carrying out this contract.

Q. For the purpose of carrying out this contract ?■

A. Yes, in case Lindvig did not. [95 — 72]

Q. You expected all the time that Mr. Lindvig
would go on and carry out the contract, didn't you,
that is, that his ships would be used in that trade ?

A. Yes.

Mr, MOORE. — Q. I will ask you to state whether
or not when you found out that Mr. Lindvig was ob-
jecting to your having made the contract you made
any effort or tried to buy these ships from him1?

A. Yes.

On July 11th, 1917, I wrote the following letter
to W. A. Simonton :

Defendant's Exhibit No. 5-F.

"July 11, 1917.
"Mr. W. A. Simonton,
"Traffic Mgr.,

"E. I. Dupont de Nemours & Co.

"Palace Hotel, G.D. San Francisco Cal.
"Dear Mr. Simonton:

"CONTRACT NEST YEAR
"I am now in receipt of a cable from the owners
through the Norwegian Delegation at Washington,
stating that the vessels cannot be fixed for more than

118 <7. Henry Smith

owe voyage at a time. It develops that influence has
been broughl to bear with the object of having the
vessels ready for the Atlantic service if necessary.

"In view of my having signed the agreement with
you for the 40,000 tons to be lifted during the next
year, it would be of importance that you take the
matter up with our Government, so as to avoid any
misunderstanding.

" Yours very truly."

(The document was marked Defendant's Exhibit
5-F.)

On July 9, 1917, I wrote the following letter to
W. A. Simonton:

" July 9, 1917.
"Mr. W. A. Simonton,
" Traffic Manager,

"E. I. Dupont de Nemours & Co.

"Palace Hotel, San Francisco, Calif.
"Dear Mr. Simonton:

"I am sending you herewith contract and nine
copies. I have not signed the contract as yet, as I
wish you would look it over first. The changes that
I have made [96 — 73] as follows, cover, Average
per month 3400 tons, and 8000 tons instead of 5000
tons, discharge at Dupont 500 instead of 350, and
delivery of Nitrate as fast as ship may receive at
place of loading. Notice of distribution of cargo,
twenty days instead of ten day. I hope you can
see us through on this latter point, as with the em-
bargo coming on it will be more difficult of course
to handle south bound freight.

vs. A. 0. Lindvig. 119

"Outturn weight to govern instead of bill of lading
weight. Embargo clause inserted as agreed.

"I have not had a confirmation from the owners
in Norway, but if you will assist me in getting an
early delivery of the vessel now building at Union
Iron Works Co., I think we shall be able to carry out
the contract. Contract time from June 1st, 1917 to
June 1st, 1918.

' < Yours very truly. ' ' [97—74]

Defendant's Exhibit No. 4-S.

AGREEMENT between C. Henry Smith of San
Francisco, Calif., (the carrier) and the E. I.
Dupont de Nemours & Co. of Wilmington, Del.
(the shipper), for the freighting of nitrate of
soda in bags, by steamer, from ports in the Ni-
trate Range in the Republic of Chile, between
Pisagua and Taltal, both inclusive, and San
Francisco, Cal., and/or Dupont, Washington,
and/or Powder Point, British Columbia.

1. The Shipper agrees to ship and the Carrier to
provide tonnage for the Shipper's nitrate re-
quirements for San Francisco, and/or Dupont,
(Tacoma), and/or Powder Point, British Col-
umbia, for the year June 1st, 1917 — June 1st,
1918, amounting to Forty Thousand (40,000)
tons, 10% more or less, in connection with the
Norwegian steamers "B'aja California," "Sina-
loa," "Regulus," and the steamer now building
at the Union Iron Works Co., to be completed
September, 1917, delivery expected November
1917, and/or other steamers and motor vessels,

120 C. Henry Smith

(tons of 2240 pounds always understood).
Freight payable on outturn weights. Cost of
weighing at the expense of Shipper.

2. The (airier to supply tonnage at intervals of

about Forty-five days, and agrees to give the
Shipper at least Thirty (30) days notice on
each occasion, of the name of the boat and ap-
proximate loading date. If after naming
steamer and loading date, steamer is delayed for
twenty days or more, the carrier is to reimburse
the Shipper for any loss incurred by the shipper
account of extra storage and/or insurance, oc-
casioned by such delay, or Carrier may sub-
stitute another steamer.

3. When it is foreseen that the succeeding boat is

likely to be delayed, the Carrier may call for
Two monthly lots, or about together Eight
Thousand (8,000) tons or 10% more or less, Car-
rier's option by giving the Shipper at least
Thirty (30) days notice. In such cases the
Shipper has the right then either to supply the
Eight Thousand (8000) tons, or to release the
Carrier from the obligation to provide tonnage
in the time of respective vacancy in departure.
Such additional shipment of Eight Thousand
(8000) tons, if effected, would thereby antici-
pate the next regular shipment to the same
extent.

4. The Shipper, direct or through his agents, is en-

titled to ship from any one safe nitrate port
within the Taltal-Pisagua Eange, both inclusive,
two places between Iquique and Pisagua to

vs. A. 0. Lindvig. 121

count as one port, — the port named above or two
places between Taltal and Pisagua, but in load-
ing this cargo ships are not to be sent out of
geographical order, that is, they are to load first
at the most Southerly port, and thence in geo-
graphical order. Cargo to be delivered along-
side ship as customary for nitrate steamers, and
loaded as fast as nitrate may be received by the
ship.

5. Destination : San Francisco, Cal.

Upon notice to Carrier not less than Twenty (20)
days before expected arrival of ship, at San Fran-
cisco, the Shipper is privileged to declare for Dupont
(Tacoma) Wash, (or Powder Point), British Col-
umbia, for a quantity of not less than Five Hundred
(500) tons. At Dupont, or Powder Point, the con-
signee is to provide a safe berth, free of wharfage
and without delay. Delivery to be taken according
to the custom of the port for nitrate steamers.

6. FREIGHT RATE to San Francisco, Thirteen

and 75/100 ($13.75) Dollars per ton of 2240
pounds, gross weight. The use of Dupont,
(Tacoma) or Powder Point, B. C, to incur an
extra freight of fifty (50^) cents per ton on the
quantity delivered there. Discharge not less
than Five Hundred (500) tons at Tacoma, per
day, and at San Francisco and Powder Point, as
fast as Nitrate may be delivered from [98 — 75]
ship. One-third of amount of freight payable
on shipment of cargo.

7. Shipper responsible for Demurrage at the rate
of Seven Hundred Fifty ($750.00) Dollars for

122 C. Henry Smith

steamers "Baja California/' "Sinaloa" and
Fifteen Eundred ($1,500.00) for "Regulus"
and new building, per day, for defaults in de-
livery at loading port or delays in discharge.

8. The Shipper is to have the privilege of shipping

nitrate of soda by any steamer now under time
charter to them or controlled by them, during
the life of this contract, and such quantity as
may be shipped on such steamer or steamers,
thereby anticipates their next monthly ship-
ments to the extent of that amount, figuring the
monthly shipments to be 3,400 tons per month,
if carrier fails to furnish steamer within speci-
fied forty-five days. However, the shipper is to
give the carrier at least Sixty (60) days notice
of their intention to use any of their time char-
tered or controlled steamers. Such shipments
via any of Shipper's boats as named above,
would be entirely for Shipper's account.

9. Other general conditions of current du Pont ni-
trate charter party to prevail. Adjusters in
case of General Average to be appointed by Car-
riers for hull.

10. This engagement commences on the 1st day of

June, 1917, and continues until the 1st day of
June, 1918, inclusive.

11. Both parties may delegate to their respective
Valparaiso Agents, the working out of shipping
details and likewise to San Francisco, and/or
Dupont, and/or Powder Point, the matter of
discharging details.

vs. A. O. Lindvig. 123

12. The Ship has liberty to call at any ports, in any

order to sail without Pilots, and to tow and as-
sist vessels in distress, and to deviate for the
purpose of saving life or property.

13. Should the Government place an embargo on
foodstuffs, etc., which may prevent the Carrier
to obtain southbound cargo, this contract will
automatically cancel.

The Act of God, perils of the sea, fire, barratry of
the Master and Crew, enemies, pirates, and thieves,
arrests and restraints of princes, rulers, and people,
collisions, stranding, and other accidents of naviga-
tion excepted, even when occasioned by negligence,
default or error in judgment of the Pilot, Master,
Mariners, or other Servants of the Shipowners.

Ship not answerable for losses through explosion,
bursting of boilers, breakage of shafts, or any latent
defect in the machinery or hull, not resulting from
want of due diligence by the Owners of the Ship,
or any of them, or by the Ship's Husband or
Manager.

SIGNED IN TEN (10) COPIES, FOR A SIN-
GLE PURPOSE.

Date— Jul. 10, 1917.

(Signed) C. HENRY SMITH.
E. I. DUPONT DE NEMOURS & CO.

By (Sgd.) W. A. SIMONTON. [99—76]

(This document was marked Defendant's Exhibit
4-S.)

The item of $2,049.65 is five per cent on the inward
freight of the " Governor Forbes'' on her inward
voyage arriving at San Francisco on October 3d, or

124 C. Henry Smith

(Testimony of C. Hemy Smith.)

4th in 1917. She left Guayaquil in September 1917,

with a cargo of cocoa.

Mr. MOORE. — Passing to another matter, Mr.
Smith, which might be considered in this connection,
you have retained, have you not, a suspense item of
$5,000 to cover bookings made in your office and en-
gagements prior to October 1 on outward bound
freight? A. Yes.

Q. Just state what the fact was in that connection
because it bears on the same matter?

A. Well, they took awray all the records of freight
booked which wre had made, and when we wanted to
look the matter up we had no book in the office and
wre asked them to return them and they said then
they had not booked no cargo at all, and the corre-
spondence would show they admitted taking the
books and they then returned some of them.

Q. Is your claim in that connection that before
October 1 the employees of your office who were
going to go over to Mr. Lindvig's office were booking
freight while still in your employ ? A. Yes.

Q. For how long back had that condition of affairs
been going on where they were booking freight in
your office while still in your employ which was not
to be loaded on board of vessels until after October
1 i A. That wras three or four months back.

On October 27, 1917, Mr. B. Lindvig, General
Agent wrote me a letter, which reads in part as
follows: [100—77]

vs. A. O. Lindvig. 125

Defendant's Exhibit No. 4-Q.

"We enclose herewith copies of bookings cover-
ing cargo contracted prior to October 1st, and will
state further that our engagements here are open for
inspection.

Our Mr. Silva states that he spoke to you about
August 25th regarding bookings for October/No-
vember and you advised him that it was all right to
go ahead and contract freight, that he could take the
bookings over on the 1st of October, and the transfer
was made accordingly.

"We cannot grant that you have a right to a credit
on cargo that has not even been shipped and that will
go forward well over the time that the change took
place.

"Mr. Silva 's intentions were not to put on a man
in our office while he was still in your employ, but to
resign and come over himself on September 1st.
This he would have done had there been any question
regarding business for shipments beyond October 1."

(The letter w^as marked Defendant's Exhibit 4-Q.)

I have nothing to do with the operation of the ves-
sels, their outfitting, or their tackle, furniture, or re-
pairs, or with the appointment of their mafters, or
the employment of their crews, or anything to do
with the furnishings of provisions and stores, or
with the preservation of proper certificates, or sur-
veys, or their insurance, or management.

126 C. Henry Smith

Testimony of John A. Bishop, for the Defendant.

JOHN A. BISHOP, a witness called on behalf of
the defendant, testified as follows:

Direct Examination.

1 am an average adjuster, connected with Johnson
<£ Hi ggins, and have been engaged in that business
for twenty-eight years, my business having been en-
tirely that of an adjuster of averages and insurance.

Q. Your business has been entirely that of an ad-
juster of averages and insurance'? A. Yes.

Q. You have no connection whatsoever with any
steamship lines, and never had had ?

A. No. [101—78]

Q. And know nothing about their business at all ?

A. Except in a general way, as taught by ex-
perience in our own business.

Q. Simply as a matter of the adjustment of gen-
eral averages between the insurance companies and
the ship owners, where insurance is in question?

A. No; it is not confined to the question of in-
surance companies, Mr. Frank. * * *

A. The question of general average is not a mat-
ter between the ship owner and the insurance com-
pany, but a matter between the ship and cargo
owner.

Q. Between the ship, cargo and freight?

A. Between the ship, cargo and freight.

Q. In other words, all the interests that are at
risk at the time of an injury or damage to the
vessel? A. That is correct.

vs. A. 0. Lindvig. 127

(Testimony of John A. Bishop.)

Q. It is also carried into the insurance and de-
pends on the insurance companies assuming the
risk of the ship owner or whatever is insured?

A. It does not necessarily have any connection
with insurance, Mr. Frank. The vessel may be in-
sured, or the cargo may not be insured, and the
question of general average arises irrespective of
the insurance.

Q. It does not have any connection with the busi-
ness of steamship companies, or with any particular
fixed line of contracts, has it? The contracts that
come before you are as varied as the days of the
year, for instance. * * *

A. A general average is apart from contracts
altogether.

Mr. FRANK— Q. It has nothing to do with them?

A. It has nothing to do with the contracts.
[102—79]

Mr. MOORE. — Q. Have you had occasion at
numerous times to observe what is the practice,
if any, with respect to allowance to general agents
of reimbursement to themselves for services
rendered in connection with salvaging of vessels
where their contracts provides that they shall have
a fixed percentage of the freight earned or carried?

A. I have had numerous instances.

Q. Numerous instances? A. Yes.
Q. Will you name a few of the instances that you
remember in which you have made observation in
connection with that practice or custom?

A. Williams, Dimond & Co., agents of the

128 C. Henry Smith

(Testimony of John A. Bishop.)
American-Hawaiian Steamship Company, Leonard
Gray, who was the agent for the Cosmos Line, E. C.
Evans, agent for some British ship owners, Balfour
Guthrie & Co., agents for the Harrison Direct Line.
We have had several instances for Williams,
Dimond, as agents for the American-Hawaiian Line.
I suppose I could name at least from six to eight
without going back on my records at all.

Q. Would you do that, please?

A. In the case of the " Alaskan," belonging to the
American-Hawaiian Line, Williams, Dimond & Co.,
were the general agents on the Coast; she was on fire
in San Diego in 1910.

The "Pennsylvania" was also on fire down near
Panama, bound for San Francisco; the "Anubis,"
of the Cosmos Line, went ashore in, I think it was,
1908, near Santa Barbara, on San Miguel Island;
Lennon Gray was the agent for the Cosmos Line at
that time. The "Pleiades" was ashore on the
Southern California Coast, belonging to the Lucken-
bach Steamship Company, Williams, Dimond &
Company were the agents. The "St. Nicholas," a
British vessel, was on fire bound in to San Fran-
cisco, Balfour, [103 — 80] Guthrie & Co., wTere
agents; the "Queen Alexandria" struck on the
Columbia River Bar, putting in to San Francisco;
E. C. Evans, of San Francisco, was agent.

Q. I will ask you to state whether or not, in all
the cases mentioned by you occurring with respect
to the vessels named, of which Williams, Dimond &
Co., were agents, whether or not in each and every

vs. A. 0. Lindvig. 129

(Testimony of John A. Bishop.)
of those cases the general agent was allowed com-
pensation for the services rendered by him in con-
nection with those vessels ?

To this question counsel for plaintiff objected as
follows :

"Mr. FKANK. — I object to the gentleman's com-
petency to testify upon the question of custom, and
n the second place I object to the question sub-
stantively on the ground that the evidence as to
custom that is offered cannot be introduced as tend-
ing to vary the terms of the contract before us ; this
is not a question between the cargo owners and the
freight owners, and the ship owners, but is purely
and only a question between the ship owner and his
agent, on a private contract. * * * I object to
the question, as before, both as to the competency
of the witness, and to the competency of the testi-
mony, even if this man were competent to testify.
This is not a question of compensation between prin-
cipal and agent, but it is compensation entirely be-
tween different interests, and under entirely dif-
ferent circumstances. It has nothing to do with
this question."

The Court thereupon sustained said objection, to
which ruling counsel for the defendant duly ex-
cepted, and said exception is here designated

EXCEPTION No. EIGHT.

Q. I will ask you whether or not it is the custom
in all cases where the general agents render ser-
vices in connection with the salvage of the vessel,
to not only allow him from his principal a compen-

[30 C. Henry Smith

I Testimony of John A. Bishop.)

sat ion for the general services in connection there-
with, bul an allowance of 2% per cent on the total
amount [104 — 81] of disbursements in connection
therewith, if the money be that of his principal, and
5 per cent of the money be that of himself.

To which question the counsel for the plaintiff
then objected in same manner and upon same
grounds as the objection last hereinabove set forth,
and the Court thereupon sustained said objection, to
which ruling counsel for the defendant duly ex-
cepted, and said exception is here designated
EXCEPTION No. NINE.

I will ask you, Mr. Bishop, what is the fact as to
whether or not there is a uniform custom in San
Francisco, and has been for twenty years last past,
of allowing general agents of steamers and steam-
ship companies, special compensation for their ser-
vices rendered in connection with salvaging of ves-
sels, and a commission of 2y2 per cent upon moneys
advanced by them, if the money belongs to the
owners, and 5 per cent in cases where the general
agency contract specifies 5 per cent as the compensa-
tion therein mentioned in respect to freight earned.

To said question counsel for the plaintiff objected
on the ground that the witness is incompetent to
testify on the question of custom; that the question
does not refer to compensation between principal
and agent, but to compensation entirely between dif-
ferent interests, and entirely different circum-
stances ; that it is immaterial ; and further, upon the
ground that the question is leading; and further,

vs. A. 0. Lindvig. 131

(Testimony of John A. Bishop.)
that the question presupposes that the agent is to
be paid 2% per cent out of the money that the owner
pays, and the Court thereupon sustained said ob-
jection, to which ruling counsel for the defendant
duly excepted, and said exception is here designated
EXCEPTION No. TEN. [105—82]

Testimony of Wilfert Page, for Defendant.

WILFERT PAGE, a witness on behalf of the
defendant, testified as follows:

Direct Examination.

I am an avereage adjuster, connected with George
E. Billings Company, and I identify this book which
I hold in my hand as an adjustment of the general
average and salvage expenses in connection with the
wreck of the "Sinaloa."

The counsel for the defendant thereupon offered
in evidence the entries contained on page 226 of said
book, reading:

" $3,165.27, C. Henry Smith remuneration
for account 5% commission on
$63,305.54 $3,165.27"

To this offer counsel for plaintiff objected upon
the ground that it is immaterial; that the general
average account is not between plaintiff and de-
fendant, but between different parties, viz.: ship,
cargo and freight, none of which interests were in
Mr. Lindvig; that it is outside of the issues, the
counterclaim being a setoff based on services ren-
dered, and not based upon account money had and
received. The Court thereupon sustained said ob-

[32 C. Henry Smith

(Testimony of Wilfert Page.)

jection, to which ruling counsel for the defendant

duly excepted, and said exception is here designated

EXCEPTION No. ELEVEN.

This is an adjustment of the general average and
salvage expenses in connection with the wreck of
the "Sinaloa." It was completed in August or
September, 1918, and is printed or made with an
electric pen, so that a number of copies are struck
off. Copies of this book were turned over to A. O.
Lindvig.

Q. You represented the cargo of the vessel, did
you'?

A. No. We were appointed by the charterers of
the vessel.

Mr. PRANK. — Q. The Dupont Company, wasn't
it? A. Yes. [106—83]

Mr. MOORE. — Q. I will ask you to state whether
Mr. Lindvig ever thereafter or any member of his
office, dissented from the item therein contained, the
$3,165.27 allowed to Mr. Smith in connection with
his services with respect to the salvaging of this
vessel %

To this question counsel for the plaintiff objected
as immaterial, and the Court thereupon sustained
said objection, to which ruling counsel for defend-
ant excepted, and said exception is here designated
EXCEPTION No. TWELVE. [107—84]

We were appointed by the Dupont Company.
The vessel was carrying nitrate for the Dupont
Company at the time she went on Cape Blanco.

vs. A. O. Lindvig. 133

(Testimony of Wilfert Pago.)

Q. Was there any contribution to be made by
the Dupont Company to the general average?

Mr. FRANK. — That is immaterial.

The COURT.— What is the purpose of this?

Mr. MOORE. — I want to show that so far as that
cargo is concerned that Mr. Lindvig made demand
upon that cargo based on the contribution made to
the general average which would include the por-
tion of the cargo through the payment of this item
of $3,165.27 allowed to Mr. Smith.

The Court thereupon sustained said objection, to
which ruling counsel for defendant duly excepted,
and said exception is here designated

EXCEPTION No. THIRTEEN.

I did not have anything to do with the collection
from the underwriters.

Q, So far as the cargo was concerned, do you
know whether or not Mr. Lindvig has, in fact, col-
lected from the cargo upon the basis of including
in the general average this item of $3,165.27 allowed
to Mr. Smith?

To which question counsel for the plaintiff ob-
jected as immaterial, and the Court thereupon sus-
tained said exception, to which ruling counsel for
the defendant duly excepted, and said exception is
here designated

EXCEPTION No. FOURTEEN.

Testimony of John McClelland, for Defendant.
JOHN McCLELLAND, called as a witness for
the defendant, testified:

I am an importing, exporting and shipping agent,

134 (■ Henry Smith

I Testimony of John McClelland.)
oonnected [108—85] with Henry Lund & Com-
j.any. As a part of our business we have contracted
for the building- of ships and attending to the matter
of payments. This has happened in three or four
instances in the last several years. They were ves-
sels built for the account of Norwegian owners; we
simply contracted the vessels and supervised the
payments. We did not actually superintend the
building of any vessels, as we engaged engineers
and surveyors to do that. We were acting as
brokers. Brokers on the other side cabled us and
asked us to quote them contracts for building, and
we went to the builders and found out quotations
for them and cabled them all the particulars of the
specifications, the price, etc. We would give them
a price, and, naturally, our commission would be
included in that. If we gave any price that in-
cluded our commission and the broker's commission
on the other side. We gave the brokers on the
other side a stated commission, and we got what-
ever we could out of it. All our charge was for
brokerage in securing the contract.

I would consider a proper charge for the ser-
vices of an agent, who would not only contract for
the vessel, but watched out to see that the payments
were properly made, and generally watched over
the construction of the vessel, and attended to the
transfer of her flag when the vessel was finally com-
pleted, in the case of a vessel the contract price of
which was $450,000.00, I should think a proper

vs. A. O. Li n d rig. 135

(Testimony of John McClelland.)

charge of five per cent would be a very reasonable

percentage.

In the case of a vessel, the contract price of which
was $775,000.00, the contracting for and general
supervision over her construction, where he did not
advance funds, but merely saw that the payments
were made, the money being furnished by the
owners would be one and a half per cent as a
minimum — one and a [109 — 86] half to two per
cent.

Cross-examination.

In the case of my answer of five per cent, the
agent was not advancing the money himself, but
was probably taking the trouble to go to the bank,
and attending to the filing of the papers, but an-
other reason for making the percentage larger was
because the cost of the vessel was so much less. The
percentage increases as the value of the vessel de-
creases. Where the price has been $775,000.00 or
approximately that, we have got three per cent.

There is absolutely no standard commission to be
charged, absolutely none. It is just a question
wThere, if you have to do any cabling you can add on
as much as you want. Naturally, if you want the
business to go through you won't make the price
too big, you will not add too big a commission. The
sellers are the ones that usually pay the commis-
sion. There is no stated commission. There are
usually two brokers, one representing the buyer, and
the other the seller. There is no agreement be-
tween them. Suppose the Union Iron Works was

L36 C. Hoir?/ Smith

(Testimony of John McClelland.)
wanting so much money to build a certain boat,
then we have to take care of the broker on the other
Bide, and we figure it up. We add that on, and
add our own, and telegraph over there that the cost
is so much, and if they come back and accept it,
we tell the Union Iron Works there is such and
such a price, and in making the contract out it is
added. The Union Iron Works pays the brokerage ;
we make an agreement with the owners for a cer-
tain price, say $500,000, and that is all the owners
know about it. And then the Union Iron Works
puts out its contract, and returns to me a certain
percentage of the contract price. All the dealings
are that way. There is no agreement at all with
the purchaser. They don't know any more than
the contract price. They know there must be
[110 — 87] brokerage in it. We contracted for one
vessel for over a $1,000,000.00, and our commission
was around $20,000.00.

Testimony of Fred L. Doelker, for Defendant.

FRED L. DOELKER, called for defendant, and
testified :

I am Traffic Manager of W. R. Grace t& Company,
and I supervise contract and commissions upon
contracts for freight and cargo.

Q. I will ask you to state what would have been
a reasonable commission to an agent for procuring
a contract entered into with the Dupont de Nemours
Powder Company here in San Fracnisco on the
10th of July, 1917, covering the carrying of forty

vs. A. 0. Lindvig. 137

(Testimony of Fred L. Doelker.)
thousand tons of nitrate, 10 per cent more or less,
from the Nitrate Eange in Chile to San Francisco
and/or Tacoma and/or Powder Point, Washington,
within the period of one year commencing June 1,
1917, and ending June 1, 1918?

A. Our customary commission is 5 per cent on
the gross freight.

Q. I will ask you to state whether or not that com-
mission would be payable to the man who secured
that contract whether or not he continued as the
agent of the steamship line throughout the entire
period that the contract referred to ?

To which question counsel for the plaintiff ob-
ject upon the ground that it is incompetent and im-
material, and thereupon the Court sustained said
objection upon the ground that it is a question of
law, to which ruling the counsel for the defendant
then duly excepted, and said exception is here
designated as

EXCEPTION No. FIFTEEN.

Mr. MOORE. — Q. Would that commission of five
per cent be payable for the procuring of that con-
tract irrespective of [111 — 88] whether or not
the agent had anything himself to do with the actual
carrying out of the contract?

Mr. FRANK. — The same objection.

The COURT.— I think that is all right. That is
a question, of course, which would depend on the
trade.

A. What is the question?

Q. Would that commission which you have men-

L36 T. Henry Smith

(Testimony of Fred L. Doelker.)
taoned apply to the agent's compensation whether he
had anything to do with the carrying out of the
contract after it was made'?

A. I would think so; yes; it would apply; if he
made the contract, he is entitled to his commission.

Q. It would be worth that, you think, simply
for procuring the contract?

A. For procuring the contract, yes.

Cross-examination.

Mr. FRANK. — Q. In your business, you are
simply a traffic agent for W. R. Grace & Co. ?

A. Yes.

Q, And you procure freight for the vessels of
W. R. Grace & Co. ? A. Yes.

Q. That go between here and South America; Is
that right? A. That is true, yes.

Q. In that capacity, you never make any outside
contracts on commission, do you?

A. Not in that particular case, but we do make
outside contracts.

Q. But you have never made any outside con-
tracts— it is the same as a broker, is it not, a char-
tering broker? A. We go outside.

Q. Answer the question. * * *

Mr. FRANK.— Q. Mr. Doelker, a contract of that
kind that was stated to you by counsel is simply of
the nature of a [112 — 89] brokerage contract or
a chartering, for instance, of the vessel?

A. As I understand it, it is a freighting contract

Q. The same thing, isn't it?

A. It is a freighting contract.

vs. A. O. Lindvig. 130

(Testimony of Fred L. Doelker.)

Q. The same thing, isn't it?

A. I don't know what you mean by "the same
thing."

Q. What is the difference between a freighting
contract and a contract to charter a vessel to carry
the freight?

A. A good deal of difference in chartering a ves-
sel and making a freight contract for a vessel.

Q. As a matter of fact, if there is that difference,
in your business, you have not been called upon to
make any contracts for freight of vessels outside of
the vessels you were operating yourself?

A. We operate on our own vessels, but we have
to arrange contracts outside for cargo for which we
have to pay a commission.

Q. You pay somebody else a commission?

A. Surely.

Q. That is the idea? A. Yes.

The COURT. — Q. Are you regularly in the em-
play of W. R. Grace & Co.? A. Yes.

Q. You never make any independent charge your-
self for any contract you negotiate?

A. Not that we negotiate ; no.

Q. That is covered by your compensation ?

A. We are operating a line. If we have to ar-
range contracts outside for cargo, we have to pay a
commission.

Q. To other brokers?

A. To other brokers or ships, as the case may be.

Mr. FRANK. — Q. Did you ever make any annual
contracts of that nature?

140 C. Henry Smith

(Testimony of Fred L. Doelker.)

A. We have made annual contracts, yes. [113 —
90]

o With whom!

A. The American Smelting and Refining Com-
pany.

Q. Anybody else?

A. Nobody else since I have been there; there
have been before.

Q. This one only? A. Yes.

Q. What commission did you pay for it ?

A. We made that contract ourselves.

Q. You did not pay any commission?

A. For our own vessels we do not have to pay
any commission.

Q. Then, as a matter of fact, there is no instance
at all in which you have paid any commission or
known of any commissions that have been paid in
your business for getting a freighting contract?

A. There is when we have to go outside, yes, for
freight.

Q. But you have not done it?

A. There may have been times when we have
gone outside; yes.

Q. I asked you instances, and you mentioned
one, and you say you did not pay for that. Now,
is there any other?

A. That is an annual contract. We have had
vessels at different times that did not have any
cargo, and we had to pay a commission to get it.

Q. That is, a particular cargo for a particular
vessel I A. Yes.

vs. A. O. Lindvig. 141

(Testimony of Fred L. Doelker.)

Q1. What vessels, for instance?

A. I don't recall offhand.

Q. You don't recall any; don't you recall any
of them at all? A. No.

Q. You do not recall any person to whom you
paid such a commission, either, do you?

A. Yes. [114—91]

Q. To whom?

A. We have paid it to our West Coast house.

Q. To your own house, that is, down in South
America? A. Dowrn on the wrest coast.

Q. Not up here in San Francisco at all?

A. Not that I can recall.

Testimony of Fred W. Wallace, for Defendant.

FRED W. WALLACE, called as a witness for
the defendant, and testified:

I am purchasing agent at San Francisco for the
Dupont Powder Company. I have prepared a
statement showing the dates and tonnage carried
under, or during the year from July 1, 1917, to
July 1, 1918, of nitrate, between the Nitrate Range
of Chile and San Francisco, and Powder Point
and Tacoma, Washington, The amount carried
was 36,301.00, tons, but the amount carried there-
under prior to October 1, 1917, was 3,546 tons. The
amount really carried under this contract subse-
quent to October 1st, concerning which there is a
dispute, is 32,755.

1 EJ C. Henry Smith

Testimony of C. Henry Smith, for Defendant

(Recalled).

C. HENRY SMITH, recalled as a witness for
the defendant, testified:

(t). I will ask you to state whether or not Mr.
Lindvig at any time claimed that you were not en-
titled to your commission on the "Regulus" until
the time that he filed this suit.

To said question counsel for the plaintiff ob-
jected as immaterial, and also because it is asking
for a conclusion and the Court thereupon sustained
said objection, to wThich ruling counsel for the de-
fendant duly excepted, and said exception is here
designated as

EXCEPTION No. 17. [135—92]

Q. I will ask you to state wThether or not Mr.
Lindvig at any time, either said to you verbally or
in writing, that you wTere not entitled to your com-
mission on the "Regulus" prior to the first day of
December, when a question was raised in regard to
that matter in a letter written by Mr. Frank, which
is carried into the bill of particulars?

To said question counsel for the plaintiff ob-
jected as incompetent and immaterial, and the
Court thereupon sustained said objection, to which
ruling counsel for the defendant duly excepted, and
said exception is here designated as
EXCEPTION No. 18.

vs. A. O. Lindvig. 143

Testimony of John A. Bishop, for Defendant

(Recalled.)

JOHN A. BISHOP, recalled as a witness for the
defendant, testified :

Q. I will ask you to state whether or not you
know what the custom is wdthout referring now to
any particular contract, what the custom is, if you
know, in regard to allowing reimbursement for ser-
vices by the agent in connection with the salvaging
of vessels, where he has a general contract wrherein
the compensation specified is a percentage of the
freight earned?

To said question counsel for the plaintiff ob-
jected as follows:

"Mr. FRANK. — I object to the gentleman's
competency to testify upon the question of custom,
and in the second place I object to the question
substantively on the ground that the evidence as to
custom that is offered cannot be introduced as tend-
ing to vary the terms of the contract before us;
this is not a question between the cargo
owners and the freight owners, and the ship
owners, but is purely and only a question be-
tween the ship owrner and his agent, on a pri-
vate contract. * * * I object to the question
as before, both as to the competency of the witness,
and to the competency of the testimony, even if this
man were competent t otestify. This is not a ques-
tion of compensation between principal and agent,
but it is compensation entirely between different
interests, and under entirely different circuip

144 C. Henry Smith

(Testimony of John A. Bishop.)

stances. It 1ms nothing to do with this question."

The Courl thereupon sustained said objection, to
which ruling counsel for the defendant duly ex-
cepted, and said exception [116 — 93] is here
designated as

EXCEPTION No. 19.

Q. I will ask you to state whether or not the cus-
tom, if any, is uniform, and has been for the last
20 years in this port, whereby general agents are
allowed reimbursement for the services rendered by
them in connection with the salvage of vessels,
where their agency contract merely specified as
their remuneration a certain percentage upon the
freight earned ?

To said question counsel for the plaintiff ob-
jected as follows:

"Mr. FJfANK. — I object to the gentleman's
competency to testify upon the question of custom,
and in the second place I object to the question
substantively on the ground that the evidence as to
custom that is offered cannot be introduced as
tending to vary the terms of the contract before
us; this is not a question between the cargo
owners and the freight owners, and the ship
owners, but is purely and only a question between
the ship owner and his agent, on a private con-
tract. * * * I object to the question as before,
both as to the competency of the witness, and to
the competency of the testimony, even if this man
were competent to testify. This is not a question,
of compensation between principal and agent, but

vs. A. O. Lindvig. 145

(Testimony of John A. Bishop.)
it is compensation entirely between different inter-
ests, and under entirely different circumstances.
It has nothing to do with this question. "

The Court thereupon sustained said objection, to
which ruling counsel for the defendant duly ex-
cepted, and said exception is here designated as

EXCEPTION No. 20. [117—94]

The defendant further testified as follows:

I entered into this contract of agency with Mr.
Eindvig in 1914. Began operations in the end of
1914. We got the first ship in Europe in 1914, the
"Baja California," the the "Sinaloa" came along;
operated on this coast with these two boats. The
business increased with the demand for cargo
space, and to meet that increased business the
"Governor Forbes" wTas bought and put on the
run.

Then the "Regulus" was bought for the same
purpose, and put upon the run. She was built for
that purpose, and put upon that run.

The "Romulus" was being built for the same
purpose, and intended for the same business.

I made no charge for the commission on the
"Governor Forbes" until October 21, 1917.

Mr. MOORE.— Q. Mr. Smith, how did it happen
that your commission on the "Governor Forbes"
Sid not appear in your accounts to Mr. Lindvig
prior to October 1, 1917?

A. Well, because I was in Europe in the end of
1916 and came back in the beginning of 1917, and
I was so busy with everything that I had no time

146 C. Henry Smith

(Testimony of John A. Bishop.)
to look through the accounts until I got back and
put the accountants on the whole account, and I
discovered it was not charged.

I rendered many accounts to Mr. Lindvig during
the period from January up to October 21, 1917.
In none of these accounts does this charge any-
where appear, except that one of October 21, 1917.

The witness is here shown Plaintiff's Exhibit 1,
and asked what it purports to be:

A. That is a supplementary statement to cancel
general account July 14, 1917. That is dated July
16, 1917. It has nothing at all in it about the
" Governor Forbes," nor [118 — 95 to 97] any-
thing in it about compensation for the "Regulus,"
and nothing in it about compensation for Hull 154.

The account is offered in evidence, marked
Plaintiff's Exhibit 1, and is as follows: [119—98]

Plaintiff's Exhibit No. 1.
Mr. A. O. Lindvig,

In account with C. HENRY SMITH.
Supplementary a/c to Cancel Gen. a/c July 14/17.

DEBIT.
Deposited First National Bank (last

Bal) $ 24,138.36

May 9. Western Union Telegraph

Co., Service 55.66

10. Postal Telegraph Co., Ser-
vice 12.22

28. Commercial NewTs Pub. Co.,

Adv 20.00

vs. A. 0. Lindvig. 147

15. O'Connel & Davis, Printing 112.00
June 20. Guide Publishing Co., Adv.. 40.00
20. Postal Telegraph Co., Ser-
vice 5 . 17

20. Western Union Telegraph

Co., Service 82.65

July 9. Union Iron Works, A/C

Hull #154 77,500.00

$101,966.06

CREDIT.
Balance Transferred from Baja Calif.

V. 11 $ 41,523.86

Balance Transferred from Gov. Forbes

V. 2 9,957.37

Advanced a/c Mrs. Petra Smith 300.00

2i/2% on $77,500.00 as per contract on

on Hull #154 1,937.50

Balance due C. Henry Smith 48,247.33

$101,966.06

San Francisco, July 16, 1917.
Canceled

(Pencil notation.) [120—99]

The witness is then shown another account, and
asked what it purports to be:

A. That is a supplementary statement to cancel
the account of July 16th, and is dated September
11th, 1917, and is a substitute for both the ac-
count of July 14th and July 16th. That has noth-

148 C. Henry Smith

ing in it about compensation for the "Governor
Forbes," or compensation for the "Regulus" or
compensation for Hull 154.

The account is offered in evidence, marked ex-
hibit 2 and is as follows: [121—100]

Plaintiff's Exhibit No. 2.
A. O. Lindvig,

In Account with C. HENRY SMITH.
Supplementary a/c to Cancel General a/c July 16,

1917.
DR.
May 9. Western Union Telegraph Co.,

Service 55 . 66

10. Postal Telegraph Co 12.22

28. Commercial News Publishing

Co. (Advt.) 20.00

15. O'Connel & Davis (Printing).. 112.00
June 20. Guide Publishing Co. (Advt.) 40.00
20. Postal Telegraph Co. (Ser-
vice) 5.17

20. Western Union Telegraph Co.,

(Service) 82.65

July 9. Union Iron Works Co. (a/c

Hull #154) 77,500.00

77,827.70

CR.
Balance Transferred from "Baja Calif."

V-ll 41,523.86

Balance Transferred from "Gov. Forbes"

V-2 9,957.37

vs. A. O. Lindvig. 149

Advanced a/c Mrs. Petra Smith 300.00

2yL>% on $77,500.00 as per contract Hull

154 1,937.50

Balance due C. Henry Smith 24,108.97

77,827.70

San Francisco, Calif., September 11, 1917.
[122—101]

At the time of this transaction I knew the date
that my contract was to expire. I don't recall the
date exactly when the arrangement was made to
extend my agency to October 1st, but it was about
the same time I presume. About August 1st is the
first time I heard of the turning over of the
agency. Nothing was said before that. On Au-
gust first I know that the business was going to
leave me. The two months after that were to en-
able me to straighten out my affairs and my busi-
ness.

The witness is then shown another account,
Plaintiff's Exhibit 3, and asked what it is, and tes-
tifies :

That is a corrected statement — a final state-
ment— supplemental statement, dated October 15,
1917. That is the next statement after those two
that are already in evidence, that I made to Mr.
Lindvig. It is the first statement in which ap-
pears a charge for attending to payments, etc.,
Hull 154, etc. And also the first statement of com-
missions on Dupont Powder Company, etc., $25,-
517.00.

150 C. Henry Smith

(Testimony of John A. Bishop.)

There is nothing in here about the "Governor
Forbes." This is October 15, 1917.

Q. Now, I call your attention, Mr. Smith, to the
order of dates on the debit side of this account,
July. August, September, October, then begins
June 1st, and under date of June 1st, are those two
charges to which I have just called your attention?

A. Yes.

Q. Why was that?

A. Well, because Hull 154 was just about turned
over, and we were winding up the affairs at that
time, and the "Governor Forbes" charge was
omitted. It w^as an oversight, because I was awray
and I wras busy.

This is an absolutely correct statement.

The account was introduced in evidence, marked
Plaintiff's Exhibit No. 3, and is as follows: [123—
102]

Plaintiff's Exhibit No. 3.
A. 0. Lindvig,

In a/c C. Henry Smith.
DEBITS.
July 20. Balance due C. Henry Smith
per corrected statement

9/11/17 24,108.97

12. O'Connell & Davis— Staty 131.25

17. Bank of Italy Int. on Loan to

pay Union Iron Works .... 87 . 50

23. Western Union Teleg. Co.,

Telegrams 5.23

23. Consul of Norway 17.86

vs. A. O. Lindvig. 151

Aug. 8. Union Iron Wks. a/c Hull

154 77,500.00

16. Com'l News Pub. Co., Adver-
tising 20.00

16. Consulate of Norway, Tele-
grams 10 . 81

16. Union Iron Wks. a/c. Hull

154 77,500.00

16. Bank of Italy Int. on Loan to

pay U. I. Wks 88.30

16. Postal Telegraph Co., Tele-
grams 29 .67

21. C. H. Smith, Deposit by Har-

old S. With Letter 7/9/17. 173.00

22. Com'l News Pub. Co., Adver-

tising 20.00

24. Deposit First Natl. Bk. Cash

on a/c Baja-California &
Governor Forbes 75,000 . 00

25. Guide Publishing Co., Adver-

tising 40.00

30. B. Lindvig, Cash 10,000.00

30. Town Taxi Co. (July) a/c

New Bldg 4.60

31. Western Union Teleg. Co.,

Co., Telegrams 31.17

Sept. 4. B. Lindvig, Cash 100.00

4. Tait's Cafe 26.15

4. C. D. Bunker & Co., Custom

Fee Pre-entry Bond .40

7. Western Union Teleg. Code

Co., Books 11.00

152 C. Henry Smith

6. Legation of Norway, Wash.,

Telegrams 24.70

13. Consulate of Norway 94.00

II. Postal Telegraph Co., Tele-
grams 11 . 28

25. Western Union Teleg. Co.,

Telegrams 27.58

25. Deposit First Natl. Bk. Bal.
due a/c Baja-California &

Gov. Forbes 27,717.74

29. Disbts. 1915/16 a/c Baja-Cali-
fornia not reported 386 . 75

29. Disbts. 1916 a/c Sinaloa, not

reported 20 . 65

Oct. 4. Town Taxi Co. Aug. & Sept.

a/c New Bldg 3.60

10. Pacific Telephone & Tel. Co.

(Switching) .40

June 1. Andros & Hengstler, Legal

Serv. Gov. Forbes 187.50

Office Remuneration.

Sinaloa Salvage a/c 66,470.81

Office Remuneration for han-
dling contract Union Iron
Works, a/c Hull 154, at-
tending to payments, etc... 10,000.00
Baja-California V. 12 Sup-
plementary a/c 3,302 . 14

Regulus V. 3 Supplementary

a/c 5,039.63

Commission on Dupont Pow-
der contract 40000 tons

vs. A. 0. Lindvig. 153

(Testimony of John A. Bishop.)

less Baja-California V. 12
shipped 2507 tons Kegulus
V. 3—1039 tons total 3546
tons. Balance to ship
36454 tons © 14.00 average

$510356.00 © 5% 25,517.80

Balance due A. O. Lindvig. . . . 31,853.90

435,564.39

[124—103]
A. O. Lindvig

In A/C C Henry Smith.

CREDITS.

July 17. Remittance a/c Union Iron Works, Hull 154 75,000.00

Aug. 16. Remittance a/c Union Iron Works, Hull 154 75,000.00

Sept. 29. Baja-California Voy. 12 Balance 57,895 . 61

29. Governor Forbes " 3 " 44,822.13

29. Regulus " 2 " 146,565.88

Oct. 11. Governor Forbes " 3 " Supple, a/c 123.10

12. Sinaloa " 9 " 32,282.97

2 1/2% on 155000.00 per contract Hull 154 3,875.00

435,564.39
Oct. 15/17. [125-104],

Q. If it is absolutely correct why then did you give
him another account of which this is a copy ?

A. I mean this one is correct.

Q. Then the other one was not correct ? This is a
corrected statement, A. O. Lindvig in account C.
Henry Smith, Supplemental Statement, dated Oc-
tober 15, 1917: Is that right?

A. Yes. That was delivered about the same time.
I have not got the date in my head.

i:>l C. Henry Smith

(Testimony of John A. Bishop.)

Q. Now, Mr. Smith, wasn't that delivered about
the -1st day of November, 1917, the corrected state-
ment, and was it not the one that was referred to in
the loiter of November 24, 1917?

A. I can't recall the date. The expert accountant
can give you that.

Q. Now, I call your attention, Mr. Smith, that in
that account which you say is correct, there is no
mention of the " Governor Forbes/' is there?

A. No, not on that one ; the other one there is.

Q. None of these that I have handed you up to this
time? A. No.

Q. This you have called the final statement supple-
menting statement dated October 15th, 1917, and
which you say is correct? A. Yes.

The document is marked Plaintiff's Exhibit No. 4,
and is as follows : [126—105]

Plaintiff's Exhibit No. 4.

CORRECTED STATEMENT,

A. O. LINDVIG,

IN A/C

C. HENRY SMITH.

FINAL STATEMENT— Supplementing statement dated October 15, 1917.

DEBITS.
July 20. Balance due C. Henry Smith per corrected

Statement 9/11/17 24108.97

" 12. O'Connell & Davis, Staty 131 . 25

" 23. Western Union Teleg. Co., Telegrams 5.23

" 23. Consul of Norway " 17 . 86

" 8. Union Iron Works a/c Hull 154 77500 . 00

Aug. 16. Com'l News Pub. Co., Advertising 20.00

' 16. Consulate of Norway, Telegrams 10.81

" 16. Postal Telegraph Co., " 29.67

" 21. C. H. Smith. Deposit by Harold S. With

Letter 7/9/17 173.00

vs. A. 0. Lindvig. 155

Aug. 22. Com'l News Pub. Co., Advertising 20.00

" 24. Deposit First Natl. Bk., Cash on a/c Baja-

California & Gov. Forbes 75000.00

" 25. Guide Publishing Co., Advertising 40.00

" 30. B. Lindvig, Cash 10000.00

" 30. Town Taxi Co. (July), a/c New Bldg 4.60

" 31. Western Union Tel. Co., Telegrams 31.17

Sept. 4. B. Lindvig, Cash 100.00

" 4. Tait's Cafe 26.15

" 4. C. D. Bunker & Co., Custom fee pre-entry

bond .40

" 7. Western Union Tel. Code Co., Books 11.00

" 6. Legation of Norway, Wash., Telegrams.... 24.70

" 13. Consulate of Norway 94.00

" 14. Postal Telegraph Company, Telegrams 11.28

" 25. Western Union Teleg. Co., Telegrams 27.58

" 25. Deposit First. Natl. Bk., Bal. due a/c

Baja-California & Gov. Forbes 27717.74

" 29. Disbts. 1915/16 a/c Baja-California not re-
ported 386.75

" 29. Disbts. 1916 a/c Sinaloa, not reported 20.65

Oct. 4. Town Taxi Co., Aug. & Sept. a/e New Bldg. 3.60
" 10. Pacific Telephone and Tel. Co. (Switching) .40

" 16. Andros & Hengstler, Legal Serv. Gov. Forbes 187.50
" 17. Barkentine Alta a/c Insurance credited
twice as per letter A. O. Lindvig, Aug.

27/17 1807.50

" 29. Commercial News Pub. Co., Advt. June/17. 20.00
" 31. Purser's Cash on hand after each voyage
and taken up in account by same a/c

Gov. Forbes Voyage #3 55.38

Gov. Forbes Voyage #4 173.14

" 31. Balance due a/c closing Baja-V. 12 1.01

" 17. Deposit First National Bank on a/c balance

due Oct. 15th 25000.00

Oct. 8. Office Bemuneration for procuring and
handling contract Union Iron Wks., a/c

Hull 154, attending to payments, etc 10000.00

Sinaloa Salvage Account 66470.81

Baja-California V. 12 Supplementary a/c 3302.14

Begulus V. 3 5039.63

lf>f> C. Henry Smith

Oct. 12. Commission on Dupont Powder contract,
procuring same, 40000 tons less Baja-
California Voyage #12, shipped 2507 tons,
[127—106}

A. O. LINDVIG,

IN A/C

C. HENRY SMITH,

DEBITS. 403710.49
July 20. Balance due C. Henry Smith, per Cor-
rected statement 9/11/17 24108.97

July 12. O'Connell & Davis, Staty 131.25

14 17. Bank of Italy Int. on Loan to pay Union

Iron Works 87.50

" 23. Western Union Teleg. Co., Telegrams 5.23

" 23. Consul of Norway, Telegrams 17.86

" 8. Union Iron Works a/c Hull 154 77500 . 00

Aug. 16. Com'l. News Pub. Co., Advertising 20.00

" 16. Consulate of Norway, Telegrams 10.81

" 16. Union Iron Wks., a/c Hull 154 77500.00

" 16. Bank of Italy — Int. on Loan to pay U. I.

Wks 88.30

" 16. Postal Telegraph Co., Telegrams 29.67

u 21. C. H. Smith, Deposit by Harold S. With

Letter 7/9/17 173.00

u 22. Com'l. News Pub. Co., Advertising 20.00

" 24. Deposit First Natl. Bk. Cash on a/c

Baja-California & Governor Forbes 75000.00

u 25. Guide Pub. Co., Advertising 40 . 00

" 30. B. Lindvig, Cash 10000.00

" 30. Town Taxi Co. (July), a/c New Bldg 4.60

" 31. Western Union Teleg. Co., Telegrams 31.17

Sept. 4. B. Lindvig, Cash 100 . 00

" 4. Tait's Cafe 26.15

'* 4. C. D. Bunker & Co., Custom Fee Pre-entry

Bond .40

" 7. Western Union Teleg. Code Co., Books 11 . 00

u 6. Legation of Norway, Wash., Telegrams.... 24.70

" 13. Consulate of Norway 94.00

" 14. Postal Telegraph Co., Telegrams 11 . 28

" 25. Western Union Teleg. Co., Telegrams 27.58

" 25. Deposit First Natl. Bk. Bal. due a/c Baja-
California & Gov. Forbes 27717.74

vs. A. 0. Li a d rig. 157

(Testimony of John A. Bishop.)

Sept. 29. Disbts. 1915/16 a/c Baja-California not re-
ported 38&- 75

" 29. Disbrs. 1916 a/c Sinaloa, not reported 20.65

Oct. 4. Town Taxi Co., Aug. & Sept. a/c New Bldg.. 3.60

" 10. Pacific Telephone & Tel. Co. (Switching).. .40

June 1. Andros & Hengstler, Legal Serv. Gov.

Forbes I87-50

Office Eemuneration:

Sinaloa Salvage A/C 66470.81

Remuneration a/c Hull 154 Contract Union

Iron Works 10000.00

Baja-California V. 12 Supplementary a/c. 3302.14

Regulus V. 3 Supplementary a/e 5039.63

Commission on Dupont Powder contract
40000 tons less Baja-California V. 12
shipped 2507 tons Regulus V. 3—1039
tons — Total 3546 tons. Balance to ship
36454 tons @ 14.00 average 510356.00

@ 5% 25517.80

Balance due A. O. Lindvig 31853 . 90

435564.39

[128—107}

A. O. LINDVIG,

IN A/C

C. HENRY SMITH,

CREDITS.

July 17. Remittance a/c Union Iron Works, Hull 154 75000.00

Aug. 16. Remittance a/c Union Iron Works, Hull 154 75000.00

Sept. 29. Baja-California Voy. 12 Balance 57895 . 61

" 29. Governor Forbes " 3 " 44822.13

Sept. 29. Regulus " 2 " 146565.58

Oct. 11. Governor Forbes " 3 " Supple, a/c 123.10

" 12. Sinaloa " 9 " 32282.97

2 1/2% on 155000.00 per contract Hull 154 3875.00

435564.39
[129—108}

1T>S (\ Henry Smith

i Testimony of John A. Bishop.)

The witness is then shown another account, and
asked what that purports to be:

A. Thai is a substituted statement for the state-
ment dated October 15, 1917.

Mr. PRANK. — I call your attention to the last
item there, November 8th on that; it was after No-
vember 8th?

A. Yes.

Q. That is the last account you sent to Mr. Lind-
vig, is it not? The other was supposed to be a final
statement, and this is a substitute for it ?

A. Yes, that is the 1st. That is the first time I
ever made mentioned of the "Governor Forbes" com-
mission in this account. The entry is under date of
October 31, "Commission on purchase of the 'Gov-
ernor Forbes' $340,000 at 2 per cent, omitted former
statement by mistake, as per offer August 18, 1916."

The document is offered in evidence, marked
Plaintiff's Exhibit No. 5, and is as follows: [130 —
109].

Plaintiff's Exhibit No. 5.

CORRECTED STATEMENT.

A. O. LINDVIG,

IN A/C

C. HENRY SMITH,

Substituted for Statement Dated October 15, 1917.

DEBITS.

July 20. Balance due C. Henry Smith per statement July

20 as corrected 9/11/17 , 24,108.97

12. O'Connell & Davis, Staty 131.25

23. Western Union Telegraph Co., Telegrams 5.23

23. Consul of Norway 17 . 86

8. Union Iron Works a/c Hull 154 77 500.00

Aug. 16
16.
16

vs. A. O. Lindvig. 159

Com'l News Pub. Co., Advertising 20 • 00

Consulate of Norway, Telegrams 10 • 81

Postal Telegraph Co., Telegrams 29.67

21. C. H. Smith, Deposit by Harold S., With Letter

7/9/17 173-00

22. Com'l News Pub. Co., Advertising 20.00

24. Deposit First Natl. Bl. Cash on a/c Baja-California

& Gov. Forbes 75,000.00

25. Guide Publishing Co., Advertising 40.00

30. B. Lindvig, Cash 10,000.00

30. Town Taxi Co. (July), a/c New Bldg 4.60

31. Western Union Tel. Co., Telegrams 31 . 17

Sept. 4. B. Lindvig, Cash 100.00

4. Tait's Cafe 26.15

4. C. D. Bunker & Co., Custom fee pre-entry bond.... .40

7. Western Union Tel. Code Co., Books 11 . 00

6. Legation of Norway, Wash., Telegrams 24.70

13. Consulate of Norway, 94.00

14. Postal Telegraph Co., Telegrams 11 . 28

25. Western Union Teleg. Co., Telegrams 27.58

25. Deposit First Natl. Bk. Balance due a/c Baja-Cali-
fornia & Gov. Forbes 27,717.74

29. Disbts. 1915/16 a/c Baja-California not reported.. 386.75

29. Disbts. 1916 a/c Sinaloa, not reported 20.65

Oct. 4. Town Taxi Co., Aug. & Sept. a/c New Bldg 3.60

10. Pacific Telephone & Tel. Co. (Switching) .40

16. Andros & Hengstler, Legal Serv. Gov. Forbes 187.50

17. Barkentine Alta a/c Insurance credited twice as per

letter A. O. Lindvig, Aug. 27/17 1,807 . 50

29. Commercial News Pub. Co., Advt. June/17 20.00

31. Purser's Cash on hand after each voyage and taken

up in account by same a/c Gov. Forbes Voyage #3 55.38

Gov. Forbes Voyage #4 173 . 14

31. Balance due a/c closing Baja-V. 12 1.01

17. Deposit First National Bank on a/c balance due

Oct. 15th 25,000.00

8. Office Remuneration for procuring and handling
contract Union Iron Wks. a/c Hull 154, attending

to payments, etc 10,000. 00

Sinaloa Salvage Account 66,470. 81

Baja-California V. 12 Supplementary a/c 3,302.14

Begulus V. 3 5,039.63

160 C. Henry Smith

12. Commission on Dupont Powder contract 40000 tons
[ess Bajs California V. 12 shipped 2507 tons Regulus
[131—110}

Y. :: -1039 tons — Total 3546 tons. Balance to ship
86454 ions @ 14.00 average $510356.00 @ 5%—

(See letter attached) 25,517.80

Oct. 31. Commission on Inward Freight Gov. Forbes V. 3

$40993.00—5% 2,049.65

31. Commission on Coastwise Freight Baja-California
V. 12 as per statement Ehincan, Fox & Company,
Oct. 10/17— £789-19-2 @ 4.75%, #3756.45 3%%.. 131.47
Nov. 5. E. I. Du Pont de Nemours Co., amount due a/c over-
payment freight Nitrate Ex. Sinaloa Voyage #8.. 3,119.12
Oct. 31 Disbursements B. Lindvig, on a/c as per statement

rendered 5,485 . 84

31. Amount due Milne, Williamson Co., Guayaquill,
Ecudor for freight and disbursements S. S. Governor
Forbes per letter October 20th ..,_ 2,799.98

31. Commission on Purchase Gov. Forbes $340,000.00 @
2% — omitted former statements by mistake — as per
offer August 18th, 1916 6,800 . 00

31. Deposit First National Bank on a/c 56,443.86

Amount held in suspense during computation of
bookings 5,000 . 00

434,921.64

[132—111].

A. O. LINDVIG,

IN A/C

C. HENRY SMITH,

CREDITS.
July 17. Remittance a/c Union Iron Works Hull 154 75,000.00

Aug. 16. Remittance a/c Union Iron Works Hull 154 75,000.00

Sept. 29. Baja-California V. 12— Balance 57,895 . 61

29. Governor Forbes V. 3— Balance 44,822 . 13

29. Regulus V. 2— Balance 146,565.58

Oct. 11. Governor Forbes V. 3— Balance Supple, a/c 123 . 10

12. Sinaloa V. 9— Balance 32,282.97

17. Barkentine Alta a/c, Insurance paid per letter A. O.

Lindvig, Aug. 27/17 265.50

17. Barkentine Alta a/c, Telegrams paid per letter A. O.

Lindvig, Aug. 27/17 70 . 00

31. Charged in error Sinaloa V. 9 a/c Gen'l. Petroleum

Co. San Pedro Barging 35.00

vs. A. 0. Lindvig. 161

(Testimony of John A. Bishop.)

31. Sinaloa V. 9. Error check Getz Bros 245.59—

245.49 .10

31. Gov. Forbes V. 2

Union Oil Co. Credit not reported 555.00

Nov. 8. Amount overcharged on statement Sinaloa Salvage

a/c Geo. W. Price Pump & Engine Company 200.00

Commission on same — 5% 10 . 00

2 1/2% on $77500.00 per contract Hull 154 1,937.50

Consular fees charged in error — Regulus V. 2, Sup-
plementary a/c — W. C. Dawson, Seattle 62 . 40

Chilian Consulate 96.75

434,921.64
[133—111}

On direct examination I suggested in regard to ser-
vices in getting the " Governor Forbes" that I had
considerable trouble in getting the flag, and having a
trial in the Supreme Court to have the title passed,
and things of that sort. I engaged attorneys to at-
tend to it, for the purpose of appealing to the Su-
preme Court.

Q. Now I call your attention to this contract, Mr.
Smith :

"The Seller, on or before October 10, 1916, is
to secure the consent necessary from any and all
public authorities to transfer and convey the en-
tire interest of every kind and nature in said
steamer to Purchaser absolutely. Said consent
or a certified copy of an order or letter giving
said consent, shall be deposited with the Hong-
kong & Shanghai Banking Corporation at Ma-
nila, P. I., immediately after said consent is
given. Notification that said consent has been
secured and delivered shall be given at the same

](V2 (\ Henry Smith

(Testimony of John A. Bishop.)

time by cable message to said C. Henry Smith,
Incorporated, at San Francisco, etc."

Now, did the seller do thaU

A. He did that with my assistance. You might say
that T volunteered in the matter; that is what I meant
when I said I had trouble about getting it in Manila
in the Supreme Court. I knew7 when these bookings
that are in dispute for subsequent to October 1st were
being made that they were being made in my office
in the manner in which they were made.

Q. You have no complaint with respect to that at
all.

A. I have only a complaint that they were taken
away. That is all I am complaining about. I un-
derstood that if the vessels were to go over into the
newT control on October 1st, it was necessary in order
that they should continue the business, that they
should go in that way.

Referring to Mr. Wallace's reports on the Nitrate
shipment, they show two shipments in August, one
on the "Baja California" and the other on the
"Regulus," made while in my office. I got the com-
missions on those two shipments.

There is a difference between Mr. Wallace's report
with regard to the second shipment and the figures
in my office, Mr. Wallace's report is 957.94, and my
office 1039.05. [134—112]

Q. In the letter received by you from Mr. Lind-
vig, dated August 29, 1917, the following occurs :

"As formerly told you there was no voucher
regarding your remuneration account building

vs. A. O. Lindvig. 163

(Testimony of John A. Bishop.)

steamship ' Regulus, ' $6,000. ' ' That refers, does
it not, to a letter written to you by Mr. Lindvig
dated July 18, 1917?

A. Yes, that is very possible.

The matter referred to in the letter of July 18,
1917, reads as follows:

"Your statement of 1st June. As far as I can see
hitherto, there is no voucher concerning the item
'Remuneration a/c Regulus $6000.' Please explain
same." (Plffs. Ex. 10.)

I replied to Mr. Lindvig 's letter of August 29, 1917,
as follows :

"Statement of June 1st. Regarding this voucher,
we have sent you one, as far as I remember, and it is
for attending to contract, making payments and
keeping books for this vessel and also for protecting
the contract."

The business of Mr. Silva in my office had to do
with attending to the business of these particular
steamers. I had no other steamers at that time.

Under this agency agreement I had quite a large
number of duties to perform and did perform during
the agency ; I made contracts for freightage, saw that
the freightage was procured and delivered alongside,
and that it was stevedored and put on board, and that
it wras transported to its place of destination, and
then discharged in a proper manner, and delivered to
the consignees.

Q. You also, in the course of your agency, attended
to the making of all contracts respecting the supplies,

1()1 C. Henri) Smith

: Testimony of John A. Bishop.)

the oil, and the general equipment of all the vessels,

did you no1 I

A. I made contracts for oil, but that was outside
of the agency agreed on. I did not buy any supplies
for the vessels. I paid the bills. I saw that ar-
rangements for repairs are made. Whatever men
were employed to do it, were doing it for me. Among
these repairs was repairs to the "Sinaloa" amount-
ing to $135,000. I treated that in the same manner
as part of my contract. I collected the freights.
Under my [135 — 113] agency that was part of
my business, and to account for them and pay all the
bills. After I collected the freights, I got in the bills
and paid them, that was part of the business that was
done after the ship had delivered her cargo.

I am making a claim in the " Sinai oa" salvage mat-
ter that I advanced my own moneys. During June
and July 1917.

When I collected these freights from these several
vessels on their several voyages, I deposited them in
my own name, and made all the payments in my own
name. I had a single account for my private moneys
and for these moneys that were collected, one single
deposit, unsegregated. Outside of the contracts of
the "Governor Forbes" and Hull 154, all the rest of
the business was done in my own name. The bills of
lading ran in my own name. The signature was by
thi agent of said steamer, C. & C. Inc., for C. Henry
Smith, Inc.

They are the agents for C. Henry Smith, Incorpo-
rated.

vs. A. 0. Lindvig. 165

(Testimony of John A. Bishop.)

It was run entirely in my own name. We changed
the bills of lading later, at Mr. Lindvig 's suggestion.
I changed them to read "South America Pacific
Line, C. Henry Smith, Inc., Agents." That was in
April, 1917. That was the wray I conducted all of
the business, so far as the operating is concerned. I
first took these moneys and mixed them wdth my own
moneys in my own account, and afterwards when I
sent a statement and wanted to send any money to
Mr. Lindvig, that particular money was taken out
and put into the First National Bank and by that
Bank transferred to Norway. All of the money
went into my private account when it came in.

Three copies of bills of lading were then offered in
evidence, and marked Plaintiff's Exhibit 16, and are
as follows: [136—114]

Plaintiff's Exhibit No. 16.

(1st Bill of Lading:)

(In large caps) "C. HENRY SMITH, INC.

311 California Street,

San Francisco,

U. S. A.

(2nd Bill of Lading:)

(In large caps) "C. HENRY SMITH, INC.

311 California Street,

San Francisco, U. S. A.

LOCAL BILL OF LADING.

RECEIVED from Mohns Commercial Company

shipment from Seattle by Steamer "Sinaloa" of C.

HENRY SMITH, INC., or any other of said Com-

166 (7. Hewry Smith

pany's Steamers, or steamers employed by it, the
Following Merchandise

2. The said packages are to be forwarded with
such reasonable dispatch as the general business of
the Carriers will permit, by Steamer or Steamers
of C. HENRY SMITH, INC., upon and under the
same agreement and subject to all of the said
Stipulations and Conditions hereon, and ON THE
REVERSE SIDE hereof, to the port of destination
or so near thereto as safe navigation of such vessel
or vessels shall then permit (but with option to the
Master of the vessel or vessels to sail without pilots,
tow and assist vessels, deviate, and to lighter, surf,
tranship, land and reship said packages or any
thereof, and to stop and to land and receive pas-
sengers and freight at other ports or places on or
off the usual route and in any other), and there, at
vessel's tackles, and in like condition to be delivered
unto the consignee or his or their assigns or repre-
sentatives, or if he or they be not on hand to so
receive the same, or if said packages be destined
beyond said port or place then to any lighterman or
wharfinger or to any forwarder or other Carrier
for and instead of the said named person, company,
assigns, corporation or representatives; and freight
at tariff rates (unless otherwise agreed) and all
charges advanced by Carriers and average shall be

paid in full in on any such delivery, and

full freight charges to be so paid on all damaged
or unsound packages; and to secure payment of all
such charges said packages are hereby pledged to
Carrier.

vs. A. 0. Lindvig. 167

16. C. Henry Smith, Inc., reserves the right, in
the event of any trouble arising between the Com-
pany and any of the Central American Republics, to
store the cargo at the risk and expense of owner,
shipper and/or consignee until such time as it may
be convenient to carry same forward for delivery,

IN WITNESS WHEREOF, the Agent of said
STEAMER hath signed two Bills of Lading, one
of which Bills of Lading being accomplished the
others to stand void. And the Shipper has also
signed this Bill of Lading.

Dated at Seattle, Wash., this 15th day of January,
1917.

F. C. & CO., INC.

G. C, For C. HENRY SMITH, INC. [137—115]

All of the provisions above and on the REVERSE
SIDE of this BILL OF LADING are hereby
agreed to on the part of the SHIPPER.

MOHNS COMMERCIAL COMPANY,

Shipper.
Per A. K. ALTENBACH.

Read conditions of Special Contract on the Re-
verse Side before Signing.

36. Carrier's liability hereunder shall be several
and shall end and its rights dependent on delivery
accrue immediately it has made delivery as above
provided; and if freight be prepaid to Carrier be-
yond said first mentioned place of delivery. Carrier
shall be shipper's agent for payment to other car-
rier of such freight as may be so paid for other
carrier's use; and freight of every carrier of said
packages by water other than C. Henry Smith, Inc.,

168 C. Henry Smith

shall, at option of such carrier, be deemed earned
when said packages shall be laden on board other
carrier's vessel and shall be payable by shipper
whether such other carrier's vessel or said packages
be thereafter lost or not lost at any stage of entire
transit; — no carrier shall be liable for delay or mis-
delivery or conversion or loss or damage unless it
be shown that same occurred while said packages
were in its possession."

" SOUTH AMERICA PACIFIC LINE.
C. HENRY SMITH, INC.,

Agents.
311 California St.,
San Francisco, U. S. A.

BILL OF LADING.

RECEIVED from C. Henry Smith for shipment
from Port Ludlow, Wash., by Steamer "Regurus"
of C. Henry Smith, Inc., Agents, or any other of
said Company's Steamers, or Steamers employed
by it, the following merchandise:

2. The said packages are to be forwarded with
such reasonable dispatch as the general business
of the Carriers will permit, by Steamer or Steamers
of C. HENRY SMITH, INC., Agents, upon and
under the same agreement and subject to all of the
said Stipulations and Conditions hereon, and ON
THE REVERSE SIDE hereof, to the port of
destination or so near thereto as safe navigation of
such vessel or vessels shall then permit, (but with
option to the Master of the vessel or vessels to sail
without pilots, tow and assist vessels, deviate, and
to lighter, surf, tranship, land and reship said pack-

vs. A. 0. Lindvig. 169

ages or any thereof, and to stop and to land and
receive passengers and freight at other ports or
places on or off the usual route, and in any order),
and there, at vessel's tackles, and in like condition
to be delivered unto the Consignee or his or their
assigns or representatives, or if he or they be not
on hand to so receive the same, or if said packages
be destined beyond said port or place then to any
lighterman or wharfinger or to any forwarder or
other Carrier for and instead of the said named
person, Company, assigns, corporation or repre-
sentatives; and freight at tariff rates (unless other-
wise agreed) and all charges advanced by Carriers
and average shall be paid in full in U. S. Gold Coin
on any such delivery, and full freight charges to be
so paid on all damaged or unsound packages; and
to secure payment of all such charges said packages
are hereby pledged to [138 — 116] Carrier.

IN WITNESS WHEREOF, The Agent of said
STEAMER hath signed one BILL OF LADING,
one of which Bills of Lading being accomplished the
others to stand void. And the Shipper has also
signed this Bill of Lading.

Dated at Port Ludlow, this 4th day of Septem-
ber, 1917.

R. S. H.
For C. HENRY SMITH, INC., Agents.

All of the provisions above and on the REVERSE
SIDE of this BILL OF LADING are hereby
agreed to on the part of the SHIPPER.

C. HENRY SMITH,

By ,

Shipper.

170 C. Henry Smith

Read Conditions of Special Contract on the Re-
verse Side Before Signing.
A letter marked Defendant's Exhibit 4-0 is as

follows:

Defendant's Exhibit No. 4-0.

"San Francisco, October 24, 1917.
"Mr. C. Henry Smith,
"311 California St.,

"San Francisco, Cal.
"Dear Sir.

"Replying to your favor of even date, in con-
nection with the balance due our principal, as stated
by you, we have the statement of the Sinaloa V-9,
Governor Forbes Supplementary V-3, Baja Cali-
fornia Supplementary V-12, and Regulus Supple-
mentary V-2 ; besides the above, we require a state-
ment covering the general average disbursements
on account of the stranding of the Sinaloa, and also
a general statement showing the balance due our
principal to date.

"We will thank you for your prompt attention re-
garding this matter, as our principal is asking
us to obtain all of these documents, and upon re-
ceipt of same, we will settle all matters pending
between us.

"Regarding the inward freight on the ' Governor
Forbes,' this was as follows, $40,992.98. Inasmuch
as the vessel arrived here after October 1st, when
the transfer took place, we feel that the commissions
on this cargo should be for our account and not for
yours, as we did all of the clerical work, etc., con-

vs. A. 0. Lindvig. 171

nected with the receiving and delivering of this
cargo.

"Regarding freight bookings prior to October
1st for shipment per Baja California or Regulus
October/November, will state that there was no
cargo contracted from your office excepting your
lumber engagements, and [139 — 117] inasmuch as
you booked them at a rate well under other lumber
which we have contracted we believe you are not
entitled to commissions on same.

"We trust that all matters will be settled in a
friendly manner, as we look forward to carrying
on business relations with you, connected with your
exports to west coast ports.

"Yours very truly,

"A. 0. LINDVIG,
"Per B. LINDVIG,
"General Agent."

"BL:D."

On November 8th, 1917, the defendant wrote to
plaintiff the following letter (Plaintiff's Exhibit
11):

Plaintiff's Exhibit No. 11.

"November 8, 1917.
Mr. A. O. Lindvig,

Kristiania, Norway.

"Dear Sir:

"I have just received your letter of July 18th
and contents noted.

"SB. BAJA CALIFORNIA.

"Referring to statement of bookings which you
call attention to, would say that these bookings

172 C. Henry Smith

were engaged before the increase of 25% took
effect In the regular trade it is always, of course,
necessary to carry forward all contracts, whether
there is an increase or not, in the rate of freight.
This matter however has been fully explained to
you as I believe you telegraphed regarding same.

"STATEMENT FIRST OF JUNE,

"Regarding this voucher, we have sent you one
as far as I remember and it is for attending to
contract, making payments and keeping books for
this vessel and also for protecting the contract

"Yours very truly,

"CHS:MC." [140—118]

On December 21, 1917, the plaintiff wrote to the
defendant as follows:
"C. Henry Smith, Esq.,

"San Francisco.
"Dear Sir:

"Referring to my letter of 14th inst., I beg to
state that I have found the following error in going
through the account for ' Governor Forbes,'
voyage 3 :

" *7y2% Commission inward freight $38,637.73/
which, of course, is meant to be 5%, and I shall

vs. A. 0. Lindvig. 173

thank you to pay the difference to my Frisco office,
viz, $965.93.

"Yours very truly,

"A. 0. LINDVIG." [141—119]

Plaintiff's Exhibit No. 13.
S. S. SINALOA SALVAGE.

Balance on
hand.
44,541.75
June 28. Haviside, Withers & Davis . .6683.83

28. " " " ..3316.17

29. E. Ramirez, Rec. Clerk 33.75

30. Muir & Symon 188.39

19. C. Henry Smith, Launch

Hire 250.

July 2. Fife Wilson Lbr. Co 3000.

3. Muir & Symon 1000.

5. Parr McCormick S. S. line.. 26.

5. Roberts & Co 73.32

5. Geo. W. Kneass 153.

5. Hotel Terminal 12.

5. Marshal Newell Sup. Co. .. .1294.50

5. J. R. McGuffick 1.20

5. West, Elliott & Gordon 355.10

5. Federal Tel. Co 2.12

5. John Fohoney, Auto Hire... 2.50

5. Marshall Newell Sup. Co.... 72.16

7. G. W. Price Pump & E. Co.. . 948.05

12. Plant Rubber Sup. Co 43.71

12. Pac. Coast Coal Co 135.20

12. J. R. McGuffick 25.50

174 (\ Henry Smith

12. Muir & Symon 1000.

16. Capt C. Bergersen 100.

17. Fife Wilson Lbr. Co 3000.

23. Muir & Symon 782.15

23. Crowley Launch & T. Co. ... 4.

23. West, Elliott & Gordon 11.

23. Fife Wilson Lbr. Co 1.15

26. Capt. Bergerson 200.

[142—120]

30. Wells Fargo & Co 73.70

30. Glendon & Wick 430.

30. B. S. Free 100.

30. S. F. Bar Pilots 54.22

30. Standard Oil Co 406.65

Aug. 1. Parr McCormick S. S. Line. . 750.

3. Price Pump Co 500.

11. H. R. Grothman 49.

14. Muir & Symon 1000.

14. Pac. Stev. & B. Co 687.93

14. Haviside Withers & Davis. .10000.

16. Coggeshall L. & T. Co 737.

16. Marshall Newell Sup. Co.. . . 356.03

16. Henry C. Petersen 2.

16. A. Bloom 22.

16. J. E. Walstrom 30.

16. C. D. Bunker 21.50

16. Shipowners & Mcht. T. Co. . . 150.

16. Fyf e Wilson Lumber Co. . . . 300.

16. Pac. Tel. & Tel. Co 13.85

16. Consulate of Norway 30.08

16. Lloyds Register 75.

16. Standard Oil Co 219.48

vs. A. 0. Lindvig. 175

16. M. A. Taylor 449.35

21. G. W. Price 850.

24. Consulate of Norway 44.40

28. Muir & Symon 711.

Sept. 4. Wedderburn Trad. Co 6411.00

4. King & Co 2.38

4. Muir & Symon 605.98

4. Pac. Stev. & Ballast Co 414.47

[143—121]

6. Sterling Laundry 19.80

6. Fyfe Wilson 1.13

6. Pac. Tel. & Tel. Co 15.40

6. Geo. Price Pump Co 200.

6. U. S. Rubber Co 22.20

7. Haller Cunningham 100.

7. Eureka Boiler Wks 494.

7. Crowley L. & T. Co 10.

12. Federal Tel. Co 1.12

15. Haviside Withers & Davis. . 8691.60

19. A. Erskine 247.

25. Capt. Sanners 175.

25. Western Union 63.74

27. C. B. Harrison 173.32

27. Johnson & Higgins 242.45

27. McNair Hdwe. Co 11.77

27. Marconi Wireless 1.24

27. L. Curtis 25.

27. Shipowners & Mchts. T. Co. . 50.

27. Haviside Withers & Davis. . 346.76

Oct. 10. Pac. Tel. & Tel. Co 1.23

59103.67
[144—122]

Received in
Rccibido en

C. HENRY SMITH, Inc.

311 California Street

SAN FRANCISCO,
U. S. A.

CABLES:

CHENRYINC.

TftAOC XA»K

FREIGHT-FLETE

Kilo* @ per 1000 Kilos= .

..■J.../,....<?tt0..\b3. " 2U00 lbs.
" - " " 2240 "

Priroaice
Capa

Id",

.10

MOHN8 COHJBHRCIAU COmP*HY
embarca" «i cl vapol ' ' "Zla^CO '^tlc/cO^CA^aJ .. .ophAn /[, (Q. (£cuf/jujL Fi

Marki
Marca

y% V*°

Mmxt^Lj J{j-LA/l~-

o°

Grci W.ikIi.
Peto Ko.

., Value, tie
Uliscrvacioaet, Valor, el

to be delivered on deck of (In- steamer subject i« the clauses "f ilii* Bill of Lading, at the

aM,,,/h diA/f icd&d^^ Eu^..

Freight for the said goods as per#uyffin to be ppid h< "'

1-ieU s„|,n- l.iv c.i.-mI.s nuTc-HitTias sei* pagadu pui los

pulrtodi ^4*v&1^^

deliver) of Bills of Lading.
^> n el pucrto dc em barque, contra entrega de los conocimientos.

lazaretto, at the risk and expense of

( day and night, also on Sun" anil Holidays.' All

Si-LCI XL COXI'IIIOXS.

to land the goods 00 the qu

the goods. Cargo for t'all.io i
.pecial surcharge nf 5 shillmy pel freight
ely after arrival at pmi ..I «!•■ .t m.iii ,.

ceases in all cases, when the cargo leaves the deck of the stea
charged i" accordance with the tariff in force at lime of shiftmen

dance with the tariff in force
i v thai the freight is prep lid.

freight and expenses unpaid.

ed to weigh m hkimii. their n I- on hoard the 'tent

id< and properly attested within

;,i, , n .i i) aftei

Hill of Ladim
The ship is at Liberty to sriae the cargo for

4. Receivers or consignees of cargo arc nut

5. Any claims under thi> Mill of Lading will not hi admim-d mil, -
tteamer and presented with the owners or their agents at the port of

6. The owners of the steamer hereby limil llicir re |>on -ilnht y t'..r any los-, damage or incomplete delivery for in:

1000.— for each package or for Mk. 2. -per t'bdvm or one kilo. as il((- Oeighl may be e.deulitcd I In- ^-\ Inhn, ..I

claim brought against them is limited in total to the value of the Steamer and the freight earn, i under tins voyage.

7. In accepting this Kill of Lading the shipper, receiver and owner ot the good- ague in al! printed, si. nnped or

In witness whereof the master or agent of the said ship has signed _J~dr * 0 a ^
En virtud dc lo cual el capitan 6 el agente del cttado buque ha firmado .Z&rflkzLi&X^ c<

on disehaigitiK without any interruption

ill j'.M. h I" be p. ml li\ ll n ikin <■ .(I

for which l lii* Hill of Lading has licen

Eh shippers and receiver! an

Aduans. Poi esta carga •

empeaar la descarga inmediatarocnte dea

dias de fiesta Todos los gastoi habido

■ ■

; 1 ,, , ,-., qui ■ ! 'i< IC no fill '■' '

recibidor, "■■!■

coxit/L ium.s i sn if.ir.r.s.
6 consignatarto, queda sutoriaada a
•s. Carga destinada al Callao
apor en el Callan un aumrntn
itrado at puerto dc destine sig

i descarga del vapor serin po
i iiue le carga
la tanfa vijcnii

nidi in- -i rleic pagadn ,

a deaeargar y dr*rmbarcar la carga del vapor i
frcgara bajo rcciUi a la Empreaa Muelle y IMraraa 6 4 la
l. El vapor qi

,lid.. a

If required by the shipowner or his agents one of the I' 11
Al exijirlo cl arm ado r 6 sua agentes, un ejemplar dc los conn

Us of Lading, all of this tenor an.

ni'cimienlo.s de iull.il hiuir > teelu
>f Lading to be returned duly receipted in exchange for the goods,
imieiitos dehe devolverse debidaiuenlc canceladn, contra entrega dc

mi me puedt n lei considi radai al

liguienlca a la descarga del vapor.

vponaable por perdidas. faltas, deterioros i

of which heing accomplished, the others to stand void,
unipltdr. los onus qued.irait sin cfecto.

que por cl valor del rapor

MOHN8 COHMHRCIAU CO|W#ANY.

iu^-

General Rules for Steamer

of Lading.

RULE 1. The shipowner is responsible, so far as no exceptions are laid down in
1) the ship, when starting on her voyage, being properly fitted out, equipped, manned and provisioned, as
voyage, except (or any defects i

1 delivery of the cargo.

2) Faults of his employees in connection with the proper stowage, custody, hi
RULE 2. The shipowner is not responsible for damage, injury and loss aru

1) the Act of God, perils of the sea, fire, explosions, collisions, stranding*, and all other accidents of navigation.

2) enemies, pirates, barratry, pilferage, theft (unless it is proved that such pilferage or theft has been committed by the ship's cr
restraint of princes, rulers or people, jettison or seizure, fumigation, disinfection, or other sanitary measures of an official cho
boycott, strikes and lockouts.

3) bursting or exploding of steam boilers or pipes, breaking of shafts or losdin
in the engines or boilers and their appi

of the voyage in exercising due diligence or

4) vermin, damage done by rats and worms, rust, sweat, decay, shrinkage, breakage, heat, rain, climatic influences, oxidation, or consequences
resulting from these causes, damage done on land or damage of any kind brought about by the inherent nature of the goods loaded or by the
packing being insufficient, weak or contrary to regulations, or by the address, designation or marking being insufficient and contrary to reg-
ulations or by obliteration or disappearance of marks, numbers, addresses or de ignations of the goods loaded, even if such damage, injury or
loss is brought about or increased by illegal acts, negligence, error in judgment or default of the pilot, master, ship's crew or other persons
employed by the shipowner in carrying out his obligations. In such case* the parties concerned have to contribute to general average if any.

RULE 3. The shipowner is only responsible for damage, injury and loss caused by deterioration, putrefaction, bending, leakage or the con-
sequences of same or by contact with or evaporation from other goods, if it is proved that such damages, injuries or losses have been caused by
default of his employees, according to Rule 1, subsection 2.

RULE 4. The ship is at liberty to sail without pilots, to carry goods of any description, to tow and assist other vessels, and to deviate for
saving human life and property.

The ship is at liberty to call at any ports in or out of the usual or advertised routes, in any order, or for any purpose, to trans-
ship the goods, to forward them to their destination in any other ship or ships, to go into drydock with the goods on board, to store them, as
i and from the ship in lighters. In such as well as in other <

RULE 5. The ship is not responsible for gold, silver, precious metals, mon
a proper Bill of Lading, containing an explicit declaration of the value, has
If goods are carried on deck with shipper's consent, the shipper takes a
transporting and delivering of live stock, unless it is proved that the damaj
RULE 6. Shipper and receiver are liable for all damage, injury and loss
inflammable, explosive, strong smelling or otherwise dangerous goods, if such
an exact description as to their nature, no matter whether the shipper was a

jewelry, works i

e has been caused by faulty stowing or placing.

aused to the ship, the shipowner, the cargo or persons

goods have been loaded without any special

vare of this or not, or whether he acted in his

valuables, unless
: of the loading.

the name of others. In case the master fears danger from such goods, he may at any time destroy or throw them overboard without being
liable for compensation.

RULE 7. Shipper and receiver are liable for all fines or losses which the shipowner, ship, or cargo may incur through non-observance of Cus-
tom House regulations or through the importation of the goods being prohibited, or through the marking of the goods, or the designation of
the weight, value, or contents of the packages, whether on the packages themselves or in the Bill of Lading, being inexact or not satisfying the
demands of the authorities. The shipowner is entitled in cases of incorrect declaration of contents, weights or values of the goods, to claim
double the amount of freight which would have been due if such details had been correctly given, and, for the purpose of ascertaining the
actual contents, weight or value of the packages, to demand from the shipper or receiver within one calendar year following upon the year of
delivery the production of the original invoices of the manufacturer.

RULE 8. If the shipowner has given a receipt for goods which are still lying on the wharf or in lighters, he is only in so far responsible
for them as he would be if the goods had already been taken on board and if the employees of those to whom the goods were entrusted would
have been in bis own service on board. This liability shall, however, not exceed the amount which the shipowner is able to recover from the
party to whom he entrusted the goods.

RULE 9. The period after which the liability of the shipowner for the goods shipped on this Bill of Lading expires, and the manner in which
the shipowner is to be notified in the case of damage, are fixed by the regulations given on the face of the Hill of Lading.

RULE 10. If on account of quarantine, threatening quarantine, ice, blockade, war, disturbances, strike, lockout, boycott, or reasons of a simi-
lar nature, the master is in doubt as to whether he can safely reach the port of destination, there discharge in the usual manner, or proceed
thence on his voyage unmolested, he is at liberty to discbarge the goods at another place or harbor which he may consider safe, wlurcby hi*
obligations are fulfilled. Receivers or shippers are liable for all expenses thereby incurred on the goods, and have to be informed if possible.
If the goods for any reason whatsoever cannot be discharged or cannot be found at the port of destination, the ship is at liberty to dis-
charge them on the return voyage, or to forward them by some other means to the port of destination, for ship's account but not at ship's risk-
In the case of Through Goods from and/or to other ports or places the liability of the shipowner is restricted to his own line.
RULE 11. Full freight has to be paid on cargo damaged or diminished by leakage. For any increase in weight owing to sea damage no
freight has to be paid.

RULE 12. The master has a lien on all goods for payment of freight, dead-freight, and difference in freight, and for any expenses incurred
before or after shipment, including demurrage, cost of repairs, if any, cost for transport to the port of shipment, and forwarding expenses, fines.
i these rules. The ship shall also be entitled to fall back on the shipper for the difference between the total
i shipowner and the net proceeds of the goods.
RULE 13. When settling claims in respect of loss, damage or incomplete delivery, the value of the goods shall be the cost price of the goods
plus freight paid in advance and expenses incurred, but excluding duty, commission and interest. The shipowner is liable for each package or
each measurement or weight unit, but not in excess of the amount stipulated on the face of this Bill of Lading. For any loss arising from
faulty late or faulty incorrect delivery of the goods, the owner is liable to the extent as mentioned above, provided that such goods are not
delivered within three months after arrival of the ship at the port of discharge.

RULE 14. Weight, measure, marks, numbers, quality, contents and value, although mentioned in the Bill of Lading, are to be considered as
being unknown to the master unless the contrary has been expressly acknowledged and agreed to. The signing of the Bill of Lading is not to
be considered as such an agreement.

RULE IS. General Average is to be adjusted according to York- Antwerp Rules, in shipowner's option at San Francisco or at a port of destina-
tion. The master has a lien on the goods for the contributions to General Average. In order to determine the,contributions tn General Average
the receivers have to declare the value of the goods and if required by the master to sign an average bond or render su'fi ient security or deposit.
RULE 16. Freight payable at port of destination, together with all other amounts specified in Rule 12. is to be paid on delivery of the goods
urrency named in the Bill of Lading, or at the option of the receiver in the currency of the country at

ilhout deduction in i

the highest rate of exchange for banker's sifiht

Freight payable in advance cannot be reclaii
tions, freight paid in advance has to be added to
RULE 17. All clauses contrary to the foregoinj
RULE 18. If differences of opinion should ari
conclusive one.

Alt disputes are to be decided according to

, even if the ship and/or cargo i
value of the goods.
des are null and void, unless such a clause has been specially agreed upon.
as to the interpretation of the foregoing rules, the wording is

Reglas Generates de Conociroientot para Vapores.

(De Salida.)

CLAUSULA I. Salvo las excepciones estipuladas en las coudiciones siguientes, el

1. De que el buque antes de hacerse a la mar •
gabilidad y aptitud para llevar 4 cabo i
miento aim poniendo todos los cuidados de un flctador cumplidor de su deber.

2. De las faltas de las persona* a su servielo en la convententc estivadura, cuatc
CLAUSULA 2. El annador no responde de los daflos, perjudicios y pcrdidas que *

1. Por fuerza mayor, peligros de mar, incendi«, explosionea, colisiones,

2. Por acton de cnemigos, piratas, ban
de alta mano, alijo 6 destruccion, fumigacion. desinfeccion u otras medidas sanitaria* de t
(boicottage), ruelgas y cierres (lockouts).

I vapor 6 tuberias, rotura de forjas o de los iparejos de carga y
menus <iue la causa sea un defecto que uodia baberse de
el cuidado de un fletador <
4. Por bicbos, inscctos, ratom

climatol6gicas, oxidacion 6 las consecuencias de esta* causas, deterioro en tierra, perjuictos <
i propio de la* mercancias 6 de sub envases defectuosos, fragile* '
'> por baberse borrodo 6 <"
en el caso de que 4 la presentacion 6 aumento de estos dafio*. deteriores y pcrdidas bayan contribuido i
faltas del pr4ctico, capit4n, tripulantcs 6 cualquiera otra persona al rervicio del annador. En tales <
de los intcresados las respectivas |
CLAUSULA 3. El armador solamente es responsable de los dafios, aver las

eros y por sus
faltado contra lo dispuesto en la condicion la, parrafo 2°.
CLAUSULA 4. El buque podr4 navegar sin practico, llevar
para salvar vidas y bienes.

Tambien es licito al buque tocar puertos dentro 6 fuera de su ruta ordinaria
trasbordar las mercaderias y reexpedirla? 4 su punto de destino en cualquier
almacenaria y hacerla transportar en lanchas al, 6 del buque, asi
i mercancias no es i
CLAUSULA 5. El buque no responde de la exacta i
obras artisticas y objetos de valor analogos, caso que de tales efectos no sc hay& firmado un i

El cargador corre por su cuenta todos los riesgos de las
la recepci6n, transporte y cntrega de animalcs vivos, 4 no ser que los daftos se originen por mala estiba 6 colocaci6n.
CLAUSULA 6. Los cargadores y receptores son responsabtes de todos los daflos, deteriores 6 perdidas que re caun
4 la carga 6 a las persona* por 4cidos, producto* in flam ah Its, explosivos, mal olientes 6 peligrosos, en caso que hay*
convenio especial y sin indicar su verdadera naturaleza, lo mismo que el cxpedidor tenga
obrado en su propio nombre 4 en el de otra persona. En caso que el capitan tcmicre algiin peligro ;

alguno de indemniiar perjuicios.

perjulcios que sufran el armador, el buque 6 la carga por
prohibida la importacirin de lo« articulos, por inexactitud 6 insuficiencia de las marcas
la dec brae ion de peso, valor 6 contenido de ellos. tanto en los envases como en los conocimientos y facturas consulares.
En caso de haberse dado datos inexactos del contenido, peso 6 valor de los bultos, el armador tiene derecho 4 cobrar por ellos doblc flete del
que les corresponde pagar y puede exigir las facturas originales del fabricante para verificar el contenido, peso y valor verdadcros de los bultos,
que el cargador 6 el receptor le presenten hasla el fin del afto siguente al de la entrega.

CLAUSULA 8. En caso que el armador diere recibo en resguardo de entregas de mercaderias existente- aun en el muelle 6 lanchas, su
endria si las hubiera tornado 4 bordo y los emplcados del in termed iario formaran parte d
armador no exccder4 nunca de la suma de que la persona in teemed iaria sea responsable ;
CLAUSULA 9. El irmino en que cesa la responsabilidad del armador

forma en que deben hacerscle las reclamaciones, e*t4n indicados en las di'posiciones que figun
CLAUSULA 1ft Si el capitan creyere no poder tocar con seguridad el puerto de su destino 6 desembarcar en el las mercancias en la forma
acostumbrada 6 continuar desde alii sin trastornos su viajc por raxon de cuarentena 6 de que le amenazara cuarentena, 6 por motivo de hiclo,
bloqueo, guerra, disturbios, huelga, cicrre (lockout), guerra comercial (bovcottage) u otras causas analoga*. esta autorizado para i
mercaderias en cualquier otro puerto que considcre conveniente. dcsemt.arazandose asi de todas obligaciones contraida*
receptores 6 cargadores son responsable? de todos los gastos que las mercaderias ocasionen por cualquiera de las causas cxpresadas y, 4 se
posihlc, scran avisados del efectuado de*ctnbarque.

Si por cualquier circumstancia, los bultos no pudieren desembarcartc 6 no se encontraren en el puerto de deflino. el buque podr4 entregarlo
4 su regrcso 6 dirigirlos del modo que estime mas oportuno at puerto de dctino a su costo, pero no 4 su rtesgo.

Tratandose de bultos en transito de 6 para otros puertos 6 [juntos, la responsabilidad del armador se limita 4 su propia Linea.
CLAUSULA 11, La carga averida 6 mermada por dcrrame esta sujeto 4 pagar flete integro. Por aumento de peso 4 causa de averia di
mar no sc paga flete.

CLAUSULA 12. El capit4n tiene el derecho de retener la carga, como prenda pretoria, para ascgurarse i
y fletes adicionales, de los gastos ocasionados por ella antes y despues del desembarque, incluso los de dei
de transporte hasta el puerto de embarquc y los de recxpedicion, de las multas, daiios y gastos de que se I
cedentcs. Igualmente tiene el derecho de hacerse pagar por el cargador la diferencia que resulte entr
el producto liquido de la carga.

CLAUSULA 13. En el arreglo de las reclamaciones por perdida. averia 6 entrega incompleta de la carga, servira de base
de la misma su precio dc costo incluso el flete pagado y los gastos de embarque habidos, pero con exclusion de loe derechoi de i
i intereses. El armador no responde, por cada bulto, medida 6 peso, en ningiin caso, dc una suma mayor 4 la consignada en la cara
Por cualesquiera perjuicios que sc ocasionen 4 causa de entrega retraaada 6 defectuosa, el armador responde basta
fijada, en caso que no efectue la entrega 4 los tres meses dc la Ilegada del buque al puerto de desemban
CLAUSULA 14. El peso, medida, marcas, numeros, clase, contenido y valor se consideraran siempre i
aun cuando esten indicados en el conocimiento, a menos que se haya convenido cxpresamente lo contrario.
se considerar4 como tal convenio.

CLAUSULA IS. En los casos de averia gruesa, se hari el arreglo y la liquidacion segiin lis regis* de York-AmWres en San Francisco 6 en un<
los puertos de destino, a opcion del armador. Para ascgurarse del cobro de las -uotas por raion de dicba averia, el capitan se rescrva el dere
de retener la carga. Los receptores estan obtigados, para los efectos de sus contribucioncs de la averia gruesa, 4 indicar el valor de las n
cancias y a firmar un documento de obligaci6n 6 dar suficiente fianza. 4 clecci6n del capitan.

CLAUSULA 16. Siendo el flete pagadero en el puerto de destino. debera satisfaccrsc juntamente con todas las demas cantidades citadas er
p4rrafo 12 en el momento de cfcctuarsc la cntrega de la carga, sin descuento, en la moneda fijada, en el conocimiento 6, si lo desea el consig
tario, en la moneda del pais al cambio, mas alto del dia de la entrada del vapor en el puerto en cheque bancario de aquella moneda.

Es flete ya pagado de antemano no se devuelve, aun cuando se pierdan el buque y la carga. Para la prorata de la averia gruesa hay <
afiadir al valor de las mercancias el flete pagado por adelantado.
CLAUSULA 17. Todas las clausula* que se opongan 4 las eondiciones anteriores son nulas, 4 menos que no se baya estij

la valoracipn

CLAUSULA 18. De haber disparidad de criterios en la interpretacion
Todos los litigios se resolver4n i

B/LNo.

C. HENRY SMITH, Inc.,

311 California St. " San Francisco. U. S. A.

LOCAL BILL OF LADING

FROM Seattle

shipper ttoana Comoro! ol

to flStpfagafta PCR btbambr "**■£*»•"

consignee' J^llll....tl**lM..I SB.*. ..

uohnn cwajwrol al florepow.i

Seattle

or Steamers employed

A* C. Jt CO. fl _» 200

.intofagusta

*COPY NOT NEQOTIABLE

ARE TO BE HELD

quality, or condition of contents of Bald pack:
1. WHICH PAOKAOE8 WERE REOE1

■ HI. EM'KEHS AGREEMENT
TO ALL :i AND

lit! I KS1 SIDE

[i ON THE

AND HEREBY DOES AQRERlANT) EVF.RYIio w, I, BEHELD

BOUND THEREBY WHETHER THE SAME BE I'RISTEII OR WRITTEN
3. The aald packagea are to bo forwarded with aoeh reaaonable di
the general buainpaa of the Carrier! will permit, by Si
0. HENRY SMITH, IKO., noon and nnder the a.me
of the eeid Stipnlatlone and

;e°a aluiTthen |
land and re.hlp aald pockarea

O ordl

Steamers of

io near thereto as safe navigation of such vessel

. . ,.,
unual route and in any

to any lis Me man or wharfinger or lo any forwarder or other Carrier
of the said nirniBd person, company, aseigns. corporation or represent
at tariff rates (unless otherwise agreed) and all charges advance

vanced bar wirt

. i) of machinery, insula!
Matter, Officers, Engineers, Crew or oil

i ■
rstood that if by fog. I

Steamer be prevented from
such time as

privilege to store the said goods at
d the Steamer, at the expense and
delivered with safety at the place

Freight is payable on weight (

port of destination, th
Ancea or any other p->
risk of the ow
of destination

fl. freight payable in advance,
as per margin, together with_all
expenses at port of delivery.
delivered, at Carrier's option.

7. All lighterage from Steamer to Steamer and/or between Steamer and shore of
goods named In this Bill of Lading, shall be at the risk of owner, shipper or eonclgnee.

8. Glass. crockery, or other articles contained in class or crockery or Castings, or
any article whatever of a fragile nature, taken only at risk of shipper, owner or

succeeding carrier
" Bill <

agreed, that the liability of any carrier, as to goods dei
>, shall be terminated by proper delivery by him to the

iding shall have the effect of a Special Contract not liable

the, doty of the Shipper, Consignee, Owner, or his Agent or repre-
ins the said packages BEFORE REMOVAL by him to ascertain
thereof shall be In a damaged condition or shall have been lost or

-FREIGHT PREPAID

BEFORE REMOV

removal of said packages.

. i " ' ',i ."„

.''■',.".■'"... ■ , „' '".'.,.< ,'■' , „

of ihc nr.i.1 i '..th ■ .ii I;iv,-h .if nny Slntc or place where claim hereon

may l.c assi-rtfil. limiti.-i; .r p-Tmi i ting i, limil i,! inn ,if u ship-owner's or carrier's

il lawi ..f tfexiCO or Central American Republics,

13. Tf the owner of the vessel shell have exercised due diligence to make said

Vessel in all r<-Mi. ■■' ■ v. .,, ,|, , :,,,,1 rn ■ .f , , r 1:,- um -.1, ■.! i » i i .;>.-. 1 rind Hiippiird. it is

hereby agreed that in oaao of tuul "r neirli-

vessel, «f from latent or other dafaet, oi renal, whether existing

ill the lime uf -.hipin.ml nr .-.t liir l..-i;m>iiriB uf the voyage, or during the viyani , hut

■ir proper r ml ril.uii'm n, ■ ■ .

twerp Rules of 18P0. OR OTHERWISE, ns CARRIER interestc
The carrier, chnrterer, agent and /or owner
diligent to mate the

16. O. Henry Smith, Inc., reserves the right, in the event of any tsr—ble arl
between the Company and any of the Central American Republics, to stoff the «
at the risk and expense of owner, shipper and /or consignee until such time as it,
be convenient to carry same forward for delivery.

17. Manifest of goods most be furnished one day before ship's departure. F
Imposed on Steamers In any Mesican port, on account of such manifest not b
furnished In due time, or errors or omissions therein to be paid by the consignee
goods. The expense of stamped paper and other Custom House charges for Tarn

. i" 'nation mast oe paid
Shippers will sign this Bill of Lad'

100 ft

Ouatoin^ Houae charfea

right hen™ ma'rjin'. """

lined .1|WO..

BILLS OF LADING, one of which Bill, of Ladim being accomplished the olheri
atand Told. And the Shipper baa alao aimed thla^Bill of Lading.

^t^^^j^mMB^JU

■•I

Stipulations and Conditions Referred to on Face Hereof and All of Which are Agreed to by Shipper

I '' ' ■■ ■ ■ I". 'I '■"' !■■■ '■' ''•■ i" I" '■■' '■■ '■' ■: i Ir ■ !.i

• -ii- Mht noting wlifc will I lnwfi minor! . itrlkaa, atop

pag, • •( labor m.i |. !-.,!.'.- in inih-il ..r rlmm "f ri<:hl th. r. lo, fir.- or wnlrr nil wharf or
' ■ i ■ ' «iv hcfor. loaded i r ifl. r ui l.-.l , .-), ...

;. '.i .1 ,' ' ', .„',.'',",■' ' "i ' .,.';„:!

I ■■..',, ■...,.'■ ■! ,, ,11 , ,

i. damags ihBl ihall result i ■ bol

I »r ■ a-lncfaci hoist ii ir. All i lures, ports, bat* i

...,.■,-■ '■ ■■ ,,,■■■ , ■ ind in | iml inn l

ball not 1 imed, tut the Hsnir muni If claimed of i

proven by shipper.

SO. Carrier .hall nol be or be hold liable for leakage or waetage of rontei

nr-i show lhal ■■ c>0 III , ■ in rood condition

packed then in and In ■ I order wtai a di

farrier and thai the package wa.. while in |V,...-s.,..n if C.tn.r i

r.. „.,.,, ,,f th,- ill. ■, i,l. ,,■■.,,■,■,■! „r hmtoVient marking, i
pii.'kngc» or do.tripli m .if (lie. ronh-tii ,, Invoice inn* I

Willi l!l ■ ! I CI l|>l ■■ ■ I 111-11 ■ ■ I'-.- I I,

ii" ■■ B ■' ■' '■■■ '<'" "■ "'I,, , -, .., k ■■■■■ .. ,, ■ i

■ine or addressing of
Consular aulhoritles.
eati are o be boroi

■, , . ■.,.

.1 lo he lightered at any

in i,. .[ . .:, d to ha

■ : I ■,.■■■ i mi I, (:,.■■- wile*.,

...i.l «.u«l |.nrk;.ces after

■■ '■" ' '1 : ■" >■-■■!-"' " ■ I" -V I., ■ - ■., ■■:! :.

farrier whrlh i I or property I ,„,i |„

,->n,l if nil freight ■ !■,.■ ■ .,.,., ;.. |)0 paid *1 ■ il ■■. el I'uri in

may .oil .ant |.;nl;^r> nl either | le ,.r prum, ■ :.', ,,,,1 .- ■ :■■■■•,) f,r i.nd f >r

aeeoonl of oa n ■ ipp! ii ■■ , oi ■>.-, hi ind ■■ anil

made, ih- shipper shall, ■ mand all rack ■■■ ,., ■ ■ >od ■ ich defl

,, ... ,i in;, master mnj nl ntt> Mm.- -.11 ,.r di.Po*e ,,f ,„.r

opli . ■ imi ■ iutd i in. de< ayod 01 ■ m ihle befori

,.'.!, ■■"■ ,i .,",",',,', ,., ,i, '" ' ,; ' ', , ,';

"r '-'lor I»in» .i .,!..., |i.,

' ; ■ 'tf'"-.l .!,.. loll ,.f liMlin- it. ii'im :h- I, I. . .,

.!.■.! ,..,■:... , . ,. , . ,|„ „ „,., , , .,,, I, .,,,,.,, ;„ ,. ■■

fj M,',. lion tb, ,' I ui . , led ,",.'l!,',.,i S3 .," ha ton '" lo hnvtTbei

I lr>ao faelo 1 aled i ind han I i ■ b nefl nf all In di inn | i

,!■ , ,■ , ,1 ■,li.,r, .■ 1( „„:,,!■ ,t,.[> .Ii,:. )„-,1l!!r',.r','t,j ,,' ,'',,',' „'",' .',,','

i ,i to rarr..-r or ila Ai of at

ai porl or plnr.- ,.f ,l.'r ., , ,-

f"r" '" '' ,["-' '^.i.n,. • ...-.-.,,,. r „ t |,,v, „r , , r. ,,(| , „ L- ,.f ,„.|, Vt.^„.| ,

■ ■ .. .,...',. !, !i ■.,',',, ': . . ," ". ', , .'": i,!! !l

. ; ■....,■■■

original poinl or port »f ibip-

M'-i.rv hair aerot'd llmt Carrier
Ii ■ ,, : , h: ■ 1'iilirrly reunited

and anrnm.toit 1,.- *rrvrd rn.-r witl.i-. m-h <\:,x* fr,,m

dale ihi I ai h rlaln ha to pi iled, prorided that If Carrier i hi n in writta

,-.:■:.,.: .-,,) ,. ,, ■ „, U |nj| n0t /'','', „,,',',, | .","

faiil MXty day. or »,il.n, ,i, t, furlh-r tim,- *.. crnnfd Im ('nrri.T .hi'l l»e >

■ '" I'l ' ' \> rr.,1 •.,,,! .'I . ,. ' ,! .,, ..I njnin.l (Vrrirr.

-''■.II '"' ■>■ ''ii'" 1'V II,. ir i.,i,,,,,.

_ rreaaiy unnrrvt-XMi that ll.,- Si ■ ,m.lii|i Cnmnnj N »■■<

">■''• 'r ».i-lr. l.-ak-ai-,- 1.n-nk»c<', ii.wire |..il , ., . ,; i,

T,,,r f.-r !■■ • .,r .lirm-f ir..-, . !l ^ .,..,, ,., , ,., .,, i,., „,h^r mn-,.

■ i mi \i detent) in ' ■ . ■ "■ ', ifa !■

Il ia expr<>a*ly

'■ ■ ' " " !■ " :'" ' I... i . .,, I .,,. „.,.,.,,:..

h-r-.i ! Mil ■ , . ■ . ■ , . . . , , | ,

■ '' ■"" '■■■ !' ■ ' ■' i",. ,,„ „ ,,., | ., : ,

rr. ,.f It..- ...Mi.-.! I..., „f „r ,!■ , -,■ ,., f .,,,, „ ;,„ ,■., .

1 i ion thereof per parknitf as (he lo.a or damage on ea<

?(! Thr iblopai bareh) repreaantl end dcrlarea thai 1h« ralne of earh parkai

.l...Ti1,.„l .,„ II,.- f„r- ,.f tl,i« Hill ..f [,ndmk> <\,-s not ,- ..■.! ll.- ,, ■

i.i., „■ !. I -I I,. II 1, ,,, ■ ,,„ ,l„ , ,, :,. r ■

. .l|T.-..,( v.l.,r: B_„,| ,.„„„ „lrh l.j-.n ..f v.l:i!.ti.n <■! -ni.l ,.n.-k.-ICrV thr r.il.- .

on royairf. Ciriter may forward i

tiro «err*ce« hr renrt.
f Carrier, aoch aervin

option of in ahip mutrr and

paid for aa If rendered by alranxert

2«. Carrier i. not and ahall not he required to doIlTar aaid paokaaea at port o

partirnlar one: and ahipper ahall notify conaijrneo nr "h™* peMon1" or f.'' "■' , '■'.!
earrior al nlarr ,.f d^livrrv t,, Mi. r. , . .,
and parkacra mar h. diaeharfed Immodialely
a«e or wharf or landing.

29. Carrirr'a tmvIi are not warn
of doe rare l.r Carrier in ihr a.-lofli, „ .

a'trolion lo tholr duties and thrir ..!,., ,, ,,. ,,t of ahip

offirera and engineera and erew hare aeeured or may aeenre It.

SO. Carrie* .hall not he liable f«r any losa of or any damage by fire to any of said
goods rapable of being eorered ny insurance.

31 pe shipper shall be liable for any loss or damage to .teamer. cargo, lighter
or wharf, re need I,, inBin.tnnl.lr .-. . ., ■■■ . ■ - . s wlihom foil

nl.'iil* and their

.lature. whrti i, iblpp« Im prlnripiii or acml

ro«d« may t.e thrown n*.-ri. ;,.i ... ,: a< -a-,- time wiih,mt r,

Eslra rharrea. If any. for diteharrlnr. lirhirrsge nr^other

•" ,l..,,'- „.,.>.! ■ , ,..■,...,! .„ ; U|j| ,,

by the ablppers and/or eooalgaaaa.

«2. The steamer ahall hare a Hen on the gooda for all frelg

::;■,;■.!.

■' i ,m, r- ,1 ■!:■ ■ .■.;■■ ^ ■■■,;,- | ■ : ,..-!, ,,. i, ,,.-!

,i land, or bt water il i n hntind h bi tipulntioi ind I ion

tranafer or b] aoeb carrier rot uch trantrer,

0«i rlei b ill have i lien on Id | ■-. ill .,.■■ ,,,.■ .- i ,.,, it nod for

,""' '■ !'■'. ." -l,n- I,,,,,- ,,r ,. ■ mIim ■ ....,,, ,,,!,.■: .■, , ,, .'.. .',,,, ■ .,, ,,: .;,. ,.,

nnd r.|, i: .,.,, ), i t,o paid by ahipper.

10. Th.. Carrier la herebj h tranted tin- richi and ,,,,ii,,n o( ,,-i.. .,;,■

rl"- rrl,:iM.I. ■■ ..,;■.■■ | I. ,m, ,:,'! .., I. ;,,!,., ;. . ,,,, , , , ,:,,,, ,.!,

m( Inn. In, i; nn.l st-ri'it i.i.1 .,.■ r. I, ..,,1, .- ,,,!,,-, ,,, |, j
-(""i ■ .< iirLi ■■,, ,n Hi ii ;■! -f aaid atonmei

.ll Il.ilir, I,, „,,,) nf Ih,' ,.\p,.-i

..: ite?*

tir.- c.r from imy other
41. That merrhand

., ,,. I) h ,

iiwny or fallin

whnrf or in warehou iwaltl , ,,M..t. traniihipmcnt

- aamai;e by tir-. fl,.,,.!. and/or tin- giving

•> '...-■ I.. ■

t:li til- fnolt nr in-gligor,..- nf Carrier
-r ahall not he lu.l.lr for d-stni.tion
or damage to gnoda h> Mr., while upon il- . .• •.■!■.. „ l„ f. o.nlmg tli.-rxou or

let ""' line; the lama therefrom, nnleai aca Bra I ei i bj the de ign ■■ at led

42. Tf the owner sh^ll hori axercised duo diligence to make the aieamer In all

m.-rly ii.:i-ifm.I ,.<|,ii|.|iMrt a, i, I <u|ip|ii',l. ii |H
1-imate or diaa.ler r.-Miltiog fr..m f.iulla or

Ihe l„--Mi.,ii.-; ..f Ihi. v.vntr ( |.|,.vi.l.-.i Ih,- lat.-nt

'■■■■- !■.,,,,. I ■ ■■,-.. ,■

„..,, ..„«*«.„. p.j_„„iS' : ,', ..■"■ .■■.: JHJTASS

rare", and ahall ■■,! ^ Ibu rati In General \ >• nig.- to the pay-

* a Oeneral Average nature that may ho
to relieve the adventure from any c«m-

d fn.to .ir been oceaaioned bv fault a
of the vessel, or any latotil defect or

nnde ..r ineurr.d for th

Tumicaled by the Clayton appsralus or niherw
for any loaa. damage or deterioration resulting

Lading forT"

In i-».i- nf loan, delrimilil or .1 . n«n :-'- to ihe lt 1 ■ m m!.. ii, ,!,.

Hereof, impoaini Itablllt) fa re rnrrin in vhnu> actual

laiody they were al Ihe time of aueh l».a. dnmnr-r, d«lriin.-ni or ,).-1m i J

11 ■ :"- '"■>■■ ■■- '■■"": ■'■'■., :" ■■ :,i; '■"■ ■""l: '"■"' ' '■ i" " ' ■ -■" '■■

44. In the event of any cargo being aerepled and carried with freight ehargra to

■ llret at d.-slioali,,!., nn.l if lhr,.,i,;li ln.iiftii-i.-nry ,,f n.nUinera or nnv .iib.r ,■■.,,,,

hatsoavar, *urh cargo or any pert tberaol la ,,:,.■■, Ib« ■ mneellni i irrlei i, ind

■" .(VMH Hill ll I l,r.-<. I ■ . II, ,11 , , ,;,■■ I .. ,. I, , ■.„ ;-,] ,. ,,MHM; ||,m|

' r-Tii m 111, i.nniM 1., lt ■,...■ .: 1,,-rv.u.r ,1, ,„,.■.,■ ,,| ,|,, ...,,,,,. .,;] fiviglil

" "';' ' ■ > ' II ■■-' '■;,«, ,. ■ ... |h,,| ,,,. , |„. -,;. ,,,,

;" ;fl- ' [l "";""- '"' 'Ii ' " '■-■ "' ' '■" ' "."•' I' 'II b' '.ii..i -- '

!'•■« .'o-l ■■-!■'■ ■ nd ■■ r ... |, >> Mil,, h, !l. .|.,p,„.r. owner nn.l „r ...,u ,ir.,.., ,t „r

■ tail '■ ■ ■" !'■■ irj di ffeetlni raabl ■ nl i cb cargo.

SOUTH AMERICA PACIFIC LINE

C. HENRY SMITH, INC., Agents

311 California St. - San Francisco. U. S. A.

BILL OF LADING "£

s.s.

•BAJA CALIFORNIA*

Yoy.

—

Moton-3 conaaaroial company

H.Herrara

01 for pun

«» of Delive

..,

Port of discharge
Through rate to

Antofagasta.

Motes qopMrclal oon©anxr MvmM IrMB_ „Mess§»_Ilgfe»

*ggm&E

C. nENRY SMITH, INC., Agent..

Company'. Steamers,

following Mer.-......!.....

Cmn.ed Salmon

160

Antofagasta

Oeitlfloo

Seattle. Tatri

Luis A.Santar.^er.

Consul tie :hilc en el satador

Oonml

pparenl good ord

I aaid package, not being known 'to Ihe Cairi.

■y or *,■£?££' S£ SOOer^nr'<£!i»Vry"'S*o. Uk.»'."d.y"ll arrival" SoJUaM

£ holiday, only eaccptad, failing which demurrage la lo be paid al

0 U. S. Gold par ruining day lor S. S. RECUlUS nod $760.00

r" Should tha .leaner be fumigated by the Clayton apparatus o

O age mulling by auch fumigation to gooda ahipped will not ba

£ 1 WHICH PACKAGES WERE RECEIVED AND ARE TO BE HELD

of *1S00.00

ERED BY

il'i i

ION,' AND TO AM

MtEHY WHETHER TH

"s'mYt H. I

^ nr vcpou-l. shall then penni

<* iuaTudVeaMp "raid"' pack.
._, paaarncerr si,d micht

1 UK

iU.il

BY EA

\D ON THE
ItEK.II T RATES ON SAID

h reasonable dispatch
f ON THL^REVERSE side

there, al ves.el"i

\ 3 S
2 at tariff n

U lion

ar Master, "nicer.. Engl.

"J '""like' CO.
. ipreaentalivos. or n n<

r the int. nr il aaid packages be de.tin.cd l.nyond .aid po

Ira itnSJai°o'lber"' ,' I cnlirgu advanced I

II be p.io in full in V- 9 Onld Coin nr, any Mich delivery,
ht an paid nn all damaged nr onaoond package.: and to ae
irge. aaid package, are hereby pledged to Carrier.
I in refrigerator. Steamer aball not be' accountable for '

.hipped under this Bill of Lading

,ter; Officer. . Engineere, Crew or nther'

shall Carrier be liable

FREIGHT

Jl6P_co. rr. at
ca rr. at

_PER TON
_PER TON
_PER 20OO
^PER 2000
_PER 1000

3-
1'

oda named in tin Bill .,, l..i..in.L. r;hal! be at tl.o ri„k of owner, .shipper or conalguee.
8. Glaas, crockery, or oilier nriicle» contained in Klaus or crockery, or CaatinB*. "r
y article whatever of a fragile nature, taken only at risk of shipper, owner or

1". iln- I. ill n[ Lutlinir shall h.ive ihe .--iTeel of a Sperinl Contract not liable to be
udified by a receipt from or any act of an intermediate carrier.

i, '"., , ,' „ . , .....'..■■..■

. ,1 llm I..I Hi.'. I ..i -I ... | ■■ .. ■ ■ ] ■■ ■■

removal of said packages.

12. Liability of Carrier shall in no event be preui.T thai, ihnt [.......ird by Keeiioi.,

■1 ii M 1 , .t'JHi; mid 4J83 of the Kevia-d St.Uut.'.; -i' ihe I. nil*-! Shim ..f America, inn) b.
Ad i.f Ihe Congress of said Unite. 1 H(at«s of America, entitled: ''An Act relating (..

.. ■ i ■ ■!■, I. ill. ■ i- M-. iv ■ ....

...Tti.-n wilh ihe nrri,,.;, ,>, proper y "— ihe " liarler Acl ' ' Ko called— approved
February 13th, 18S3, and Carrier shall have all n.'.. ,..( i. ., mi r,.i(ed to ship

ingress and all Statutes or laws of any 1
■line a limitation

ae aaid Congress and ail Sti

not discoverable bv <

to cargo, or for any special

in General Average, and shall pay any auch special charges as if auch danger, «»n|»Ke

or unseaworthiness. PuieU

iu,.....i mi <;■.-, otml Averoite. leas
their proper c<>. n<lmg to York-

Antwerp Rules of 1800, OR OTHERWISE, ss CARRIER interested shall^ elect.

lo exerciae* dSe^ilU.Bence 'xo'xaZfiTlhV*™,
•upolleil, nehhef the veai

ting oi'doL

fts, machinery or appurtenances, latent defects in

73TiJ!OXUKbumm^ oqu,p,D"t or "pp "' or

i WITNESS WHEREOF, the Ajrent of said STEAMER hath airned ---JflKJ-- ■ •
,S OF LAD] mplished A* alhtra lo

I void. And the Shipper has also signed this Bill of Lading.

^iJBBHL. aaJS *r'*3K ^^

fc _ft dL~£.

INC., Agent..
I of Ihe provl.inn. above and nn Ihe REVER3E SIDE of lb.il DILL OE I.ADIV.:
leyeby agreed to on lb. pari of ihn SHIPPER

llobna Comnereial company
par A. Kaltehbadb. shiVp.-:

Brad Condit

Stipulations and Conditions Referred to on Face Hereof and All of which are Agreed to by Shipper

19. It ia HTHd, that If Mid packages be hereon consigned otherwise than "U
Order" «r "to Ordar of Shipper' r (hat thia inilnnttt. whether Kecaipl or Bill 01
Ladliu. Iball not be negotiable nor carrier required to secure a surrender hereof ei

Ordar" or "to Order of Shipper,'' the name of the party at [.lace of deliver? to l><
notified of arrival shall be given by Shipper aad ba written heraoo. If any of aaic
packagea contain dangerous or inflammable 01 tnlotlff Ularlal the shipper am
consign** ahall each be H filing therefron

10. 0. Ueory Smith. Ida., reaarvee the right, in the ntDl of any trouble ariatm
bsiweeu lha Company and any of the Central American Republic!, to atora the carg.
at lha riak and expense ol n consignee until auch time aa It mai

IT. Manifest of goods mill be fumiahad one day befora ahip'a departure. FSnei
iaapuaad on Steamers in any Mexican .port, on account of auch manifest not beini

'hUmc cEar^sTr'^dinj
must ba paid" br the consignee thereof
. in ihe under right hand margin,
e for any lota of or from or damnge l<

r restraint of prince, i.r rulers or peoplr
aatrainta of government ur municipal 01
..ut lawful authority, riot*, strikes, atop
f right thereto, fire or water on wharf 01

«IUNB«Bla 11U or taJ
da facto officers whethei

land ar plar 'or Are before loaded on or after unloaded from vessel, or collapse of
ion of oc damage to wharf or pier or Ita coverings, nor If ahip owner ah

urcised due diligence to make the vessel on which aaid packages be shippi
•peels ■». '

(or *..y !•>»

supplied shall Carrier

lo-wit. perils of the aea or

ant defects, whether existing at time c __
the voyage, in or breakage or fracture of bell, shaft, propeller, fittings or fixtures.
.aim. pipes, machinery or appurtenances or from explosion, bursting of boilers,
collision with vessel or other structure or object, -.tramling. accident of naviga

or of ita engines, winches, hoisting gear, fittings, fixtures,

ca.s'^.fBri '

. their WDJ l« such fault or

before or after sailing or be in port or at aea: and any omission to exerclsi
1 diligence ahall not be presumed, but the same must If claimed or alleged be 1

SO. Carrier shall not be or be held liable for leakage or wastage of contents of any
package nor for breakage of or damage to contenta of any package unless shipper

•uch coalaata war* properly packed therein and in good order when delivered to
Carrier and that the package waa, white In possession of Carrier, so crushed or broken

or In part of glass, crockery, quseneware. porcelain bullowwere. pictures, picture
frames, stoves or other eastings, nor for breakage of castings not eased, decay or
deterioration of psriahebl- p. -, apntaj I moisture received

vermin, twisting or healing of metals shipped loose or In bundles, loss or damage
resulting from any burning or explosion of cargo or from inaccuracy or omission
of proper marks or description, or from delay, unless It be first proven by shipper
thai such loss or damage waa caused by or resulted from Carrier's neglect or fault or
failure In proper loading, stowage, custody, care of proper delivery of said packages
Each package '■hall ba Gy ahippar' legibly marked with full address of consignee and
if not so marked a delivery of full number of packagea of like supposed
out regard to qo.lir-v r.i ■ ■■- rK, ..,f Carrier's obliga-

tions hereunder and If any of aaid packages shall \x delayed or go astray or be else-
where landed because nol properly marked or contents not properly described. Carrier
ahall not be liable therefor. Live atoek, all perishable property, all live freight, and
all property packed In eeeund hand or weak cases, el c.-l.. .hall at all times be at
owner's risk: and neither fault nor failure nor improper loading nor bad stowage nor
improper cualody nor want of due care nor Improper delivery of or by Carrier shall be
presumed but same must if alleged be proven by ehipper.

Carrier whd

and If all freight and charges du

du7 Carrier bV m?

her public or private aale and as

made, the shipper ahall, on demand, pay all such charges or make good such defi-
ciency as the ease may he, and ahip master may at any time sell or dispose of per
iahable property when in his opinion same would become decayed or worthless before
It sou Id be delivered aa herein provided, and If same he ao sold or disposed of full
freight thereon and all charges shall be paid by shipper.

12. The aaid peekagea ahall be received by consignee at vessel's tackle Immediately
- ' lelivsry without regard to weather; if consignee
rtv or pe

landed on wharf or beach or bank or stored in hulks or put in lighters for the owner
and at owner's riak and ezpenaa.

2B. The person who signed this bill of lading aa accepting the terms thereof was
authoriied by the shipper to sign same for the shipper. Carrier ahall never be liable
for any lose of or damage to said packages nor for any damage or loss suffered in
connection therewith unless Its negltgenc* or wilful default be shown to hava been
the sola cauae of the aama: and If Carrier bcoomo Ibsbll toi MJ such damage or
loea it ahall Ipso facto be subrogated to and have the benefit of all insurance pro-
cured upon aaid packages. Collectors of customs sre hereby authorised to grant a

*4. AH claims of shipper or consignee or other psrty in Interest against Carrier or

mia-delivery of or delay In delivery of aaid packages or any thereol
tag presented to Carrier or its Agent a ~
such loss or damage, etc, and arrival of

.raaa or e.riiest newsp

ithin sald*siity days.

aaaim ahead unlaws such claim bo ao presented and auch anil ba thereupon commenced
and summons he served on Carrier within sirty days from and after the day and
dole that such claim ba ao presented, provided that if barrier ahall in writing expressly
■vmsl fjrh-r tims for the commencement of *urh suit Ihe same may be comma need
■riih.n ■'.. time so granted therefor; sn<i every such suit not ao commenced within
aaid sixty d, i| Carrier shall ba and b

barred, ul ,11 rl.lm. ,nd demand. .J.in.l O.rri.r.

». All liability 'or loaa or damar.e to tood. ih.ll ba
o,t pins fraixbt. It I, rapnaaly onderatoud Ib.t tb« uinmiatp vimpinj ■■ ool
aaoaotabla far wuli. Uakac, braakag,. Innnri paekerra. ehafaca to good. In hate*.
daruta from .(..I. of climate it Imi; or tiatri by other ntri
wrwlee when properly alowad: nor for exploalon of article, on frel.nl
■ from aaaroldable detention or <I.-Ii.y. and It la eipreaely airraed that
I In Ikia Bill Of Ladln, ara hereby ..load at not aaaeedln, ■ 100.00
I "U« • al«atant « otfcar yalo, la aapraaaly written anj dVl.rad
illy 1 tka Oorapanlaa tbarafor. In eaaa of tba total loaa of all or
anr of fba aaid rooda Ira any «•»*•. aball not .aoaad »100,00 par paekaca. and In
«... of Uka p^lj la. of »r, dajpua to »n, of ..Id r>odi tk.ll.blllt, of tba O.rri.r.
ahall not aaaaaal auk proportion tiarjof par pack.(a a. tba loaa or d.a,.,, .„ each
paakata ahall haw la ft) n of «100.00.

20- Tka .hlppar hanky rapraaaata and daal.raa that tka raltta of aach p.rka.e
d~cr.bW ^ tka ly., of tklV>IU of Udlh, *h» no, a,«J u„ «■ rf »?f»"o7
•akaaa tka ahlppn ahall a^raaal, daelara and Ikm .hall ba written op tba faea herao

tilSrsi^xJSLar -* >-• - "*">" " -,d -*— - "- a -

n. If ataaaaar ha dlaahlad op roy.rr. Oarriar aar forward aaid paeharaa to port
of dallrery ky alhar oopTayaaaaa al II rooelra addl

tloaal aoaaaaaaatloa for aaah aarrloa whan randarad aad whether performed by Ita
owa » III all or tkoae of arraaawra; aad if aalraca earrtcee ba randarad Io ahippar or

SB itti tLzsr^z^sL" ~-u •r°°ri"' -* -*• — ' --■-»'

rsrmahnad to deliver said packages at port of
consignee or other person or forwarder or

iiSrs^ttiCF

St. t>rriee:'s vesaeU an sat warranted aeawerthy aave In ao far only as sxerciae

Carrier ahall not be 1

31. The shipper shall be liable for any loss ur damage
r wharf, caused by infismmable, explosive or dangerous gt

■1 Ihr-ir iinturt-. *li.-i|i-i .m-li h]ii.iii«<r he prim

ouds may be thrown overboard or destroyed at any 111

Id or consider1" dd',Ch<'^,Sno, "f b-i"'g" ii,r °lher

of or any damage by fire to any of said
lighter

ng, numbering or addressing

.■'m,!..,':!.. 'iI'm.|l|"'l1f",Hea5l'lh "'o^ncr^er"^^..^ r^oir""

1 Steamer or Its "

fur delay H.tlie- delivery or in the ..,., •■rked with the

poll of <]. igtltMsIon, and Ihe name and address of the consignee.

'"'" ■ ■ ' 11 ■' Pi hti Ha 11 ba and be deemed to t

Carrier th.-v shf.ll he deemV.l M. be and °lo hVy^been "ao* procured" by fi^acl™!

agent therefor of shipper, hi,. I turner's li-b.lity B- currier at any port or place wl

■■ r;,i;e be needed, shall end iuiiiu-diat.-l j w-,,.,1 be anchored at or Deal

""' •»« ?- MllilT] i> |y, and aaid packages a

ort of call, from wIi.oh,. 1)1.'
discharge, or ir,,, ,

■;i ■ >" ''■ "■ '"'"■' ■ -I'' ■' -'' 1". ' ri'u.i'" „!■'"."!;.■' ,',','ijr', z\ \ ;. ';;..

shall™" romeV final dVllv" ' *d 'w^hlll *' **p*nBe- ftDti N'" ''

arrival at port of delivery .,r Iruusliipment into duamuline depul, hulk, lighter, or
other vessel or receptacle necessary or proper for Ihe ahip'a dispatch, at Ihe consignee's
risk and expense, or Ihe master may carry the goods to Ihe nearest cuim-nieiil port ..mi

otherwise to shi "ere'^eifall1' tie ^Sma»S und^r'th', ' Ir '

delivery of said good." under this Bill of Lading, and .'"»„ ." Viabfe land 'a

lien thereon bt (. n,,,.,\ | laqusnca. If the ship Is

pnTtntad b] ltd ,,,,,.. dt making due delivery of the

goods, or Is detained at quarantine, tin- goods may be forthwith without previous notice
Io shipper, owner or oonalj | , depots, la/arettes. hulks, crafts or

and such discharge shall hi g«dV all risk'

responsibility and expenses of the Carri.r therefor, us < -.rner, bsilee, or otherwise'
ending aa soon aa the goods are delivered from the nhip'H luckle. nnd all expenses
1. "ahl' er tywn! 1 Kh*" b* p*ld

!»e* imprVct'ica«fe°rLrbUso "^"''iV. '■^discharge

previ«Ss*no't?c.' ^...V , !i ,,'.",!,'' ,,'"?.:'•', '■ .',',. ''V.'rV'i.r' m i'h'.-' I'ih'p''"".^ ^'n'tiT'the nearest
safe port to which the ship ts bound, at th.- risk and eapenae of shipper, owner and

V"1"1" ■ "" Vlu "7 '•' l1"'1". "'"i »" '■■ """<" "'" K I*, a- 'I "l Dm original port of

d^-rhsrge. st the risk and expense of ■hlppei II and any of

negligence

le delivery as above provided; ami
if freight be prepaid to earner beyond said first mentioned place „f delivery. Carrier
shall be shipper s agent for payment to other carrier of „mc.i freight as may be so
n.1,.1 for other carrier s use: and freight of every currier of said packages by water
wh" fd" .He"r)r >n" "'■ '"'■■ "''"" "' ' 1 1 carrier be deemed earned

■ hie by shipper whether men olhai Barrier' a ressel 01 said paekacea be thereafter

lost or not hist a- any stage ol ent.ro ,,. , , i,,,,] be l^ble for delay or

whtfe fsVl7 package™ were in It" os'sew™*'8 nD'*" " b* lh°WD ""^ """ oocor"d
37. The rights snd liabilities of all curriers by water shall be determined hereby;

deliver aaid packages Io other ctJ1-ri,-r f,.r crriagH. such .leii.,,, . 1, 11 1.

land "r'^w" """h' B" "" "' "rrl r. ""' ! ' ""* "rrier

of such 'transfer receipt. kht|.|.i.,.- ,.-«■. i 1 • 1 . >.i I. ill ■■< l^.l.ng as may he in use for 'auch

or \y water, shipper sgree" .to 1» fcoond b/«5a

Var'or'Jarria a"' " "Sf h"

88. Carrier shall have a lien on laid prop art] (or ell fines imposed on It am

all expense Io it resulting from shipper* failure u, furnish proper Consular or <\

House papers in due time or resulting from other errors or omissions of ship

to Carrier by consignee before said
89. All expense of cooperage and repairs of packages shall be paid by shipper.
40. The Carrier is hereby expressly granted the right and option of delivering
the merchandise represented by this Hill i 1 ad! m alongaida, or

" ■ ' ,'.'..' ,,",)'; ,'iV ' ,. !,','

ssid merchandise, without nu\,r,- to and al the expense of consignee; and In the

event of Its so lending ami itorln) |#Ji adJl ■ 1 ■ Oaif.

released from |1] For loss or damage thereafter, whether arising from

or delivery shall be at owner'a risk of loss or damage by Are. flood, and/or the giving
away or falling or destruction in whole or in part of the warehouse or the wharf:

or representative; and further, that the Carrier shall not be liable for destruction

after unloading the aame ther-'

of the Carrier.

■aworthy, an- to have her proper

management of ihe steamer, or from any latent defect in
appurtenances, or from un aea worthiness, whether exist-
defect or unseaworthiness was not discovered or discoverable by the exercise of due
rence). the c shall not be liable therefor, but the consignees or owners of tha

pay salvage, and any special charges Incurred in mpeet
itribute with Ihe ship own 1 t„ the pay-

made or incurred for the common benefit, or In n|X :t<>tn any corn-
danger, damn,:. B resulted' from or been occasioned by faults

vessel, or any latent defeat or

navigation or in the managem

48. Also that in eaaa any steamer of the Carriers under this Bill of Lading be
fumigated by lha Clayton apparatus or otherwise, the ship owner shall not ba liable
for any loae, damage or deterioration resulting from such fumigation,

The aeveral carriers shall hava a Hen upon the gooda specified In tbla Bill of
Lading for all arrearages of freight and charges due by the same owners or aonalnaai
on other goods. In aaaa of loaa. detriment or damage to the goods, or data) Lfl it.e
transportation thereof. Imposing any liability hereunder, the carrier In whose actual
custody they were at thetime of such - ahall alone

ba responsible t- > ,.- prima fade

44. In the event of any cargo being accepted and carried with freight charges t..
collect at destination, end if through ,■.

whatsoever, such cargo or any part thereof Is refused by the eonnerilng carrier., Hn.|
the Carrier baring such cargo In possession at the time of such itngjl in aonpaUad
to ratum the same to the port of origin or otherwise disposo ol
and other ehargee and all expense of every nature whatever ,
incurring In tha rehsndllng and/or discharge of said cargo, ■ball

upon and again- Ml by the shlnper. owner and/or consignee m-lor

to t.klng delivery or effecting reahipment of auch eaVro. * ' ^

B/L No.

SOUTH AMERICA PACIFIC LINE

C. HENRY SMITH, INC., Agents

311 CALIFORNIA ST. SAN FRANCISCO. U. S. A.

BILL OF LADING

•REGULU8"

C. Henry Smith

San Francisco, Calif.

Andaa Exploration

Valparaieq1_ChileJ

Fort of dUcharie
Throufh

•hurt* I Valparaiso, Chile

it to I

1 WHICH ' i: TO BE HELD AN >

CMlRil TIIL CARRIERS AND BY EACH St\hU\l.

.. II.. '

I'l "

'•Hi'" .i.i.i. ■ '

I, i.i ii. i)l WHICH 'Ml, I SHIPPER HAS ACKELD

' '' "

BOUND THEREBY will .'ilIEK THE SAME BE PRINTED OB WRITTEN.

2 The Mid packages

,,f III. Cun

.'»hipPi»°id*'pi

passengers

D JJ 1%

Mi...

...„li

,,.,'.:,'

From f.llu

h.lf'be'p.''"* °
Goods in rel

l.||.|.(l Ul.,1

any psrt thereof

FREIGHT

60S18 88.00

1986,

Freight

Loaded at Kills

Total

#1986.

' livered, ul t.Virru-r's option.

7. AM li-l,(.r.i-c fri.tii MteoijH.-r l.i Steamer and/i.r t-iweii i-'I.'uiiut rvrnl fhoro of

8. Glass, crockery, or other articles contained in eli» or crockery, or CaMinga, or
y article whatever of a fragile nature, taken- onPy at rit»k of -shipper, owner or

10. This BUI .f Ladinj; shall have the effect of a Special Contrad not liable u> be

11. It shall he the duty of the Shipper. Consignee, Owner, or his Aoul r rt-pre

. '• ' ■

part thereof, he shall make and deliver in writing tu ihe Steamer's A.-, ut. a statement
of any clnim for any loss of or damage to or the absence of any p.fr:

V. I.I. t, , ■ Ill, I ).!-..■ I

of said poods; and a failure to make such examination and present such statement.
c.hall lv occlusive evidence in favor, of the carriers that all uf said p,

.,.,, ;,.,,.. |i, i. :i . in 1,1. . ,,, ..,11

l'j. Linhilitv ul CiirruT nhrtll in r.-i ■■v,ni be ^...mt ih.in lh.it provided by Section-.

r.eelion with tho r'urriuL: ■ >■ i— approved

,,. r.i ;.■-. i , , .;,.,■

of tho said Congress an da 11 Statutes or laws of any State or place where claim hereon
benefit of all laws of Uexii ricu Republics,

13. If the owner of the vessel shall have exercised due diligence to make said
vessel in all respects seaworthy and properly manned, equipped end supplied, it is
hereby agreed that in case of dancer, damage or disaster resulting from fault or negh-

at the' lime of shipment or at the he ft in rung of ihe \ ...we. or .i»ri:,c the voyage, but

... n,r.,i. but, with Ibfl m el o. dm thall eontrlbula

or unseaworthiness. Passengers' effects, if any, not to contribute in General Avcracc,
hut claims for passengers' effects sacrificed to be all-wed in General Average I.-.-,
their proper COD iTdinf to York

Antwerp Rules of 1890, OR UTIILIUMS.:, lis CAKRIKK intereM.-d (.all elect.

14. The carrier, charterer, agent and/or owner of the vessel shall only be required
to exercise due diligence to make the vessel seaworthy at <hc Una *'f shipment, can-
to make the vessel in all respects ;:, I. -,,t ,,.■;. rly manned, e-iuippud a ..I
supplied, m-ith.v th« carrier shall bee.-.me or
bursting of boilers, breakage of shafts, machinery or appurtenance latent delMU la
the hull, machinery, boilers rigging, gear, appurtenances, equipmeoi or appliances, or
from any other causes of what kind whatsoever.

Mas

IN WITNESS WHEREOF, the Agent of said STEAMER hath signed ****WJ

BILLS OP LADING, one »j • ^mpliehed the others U

stand void. And the Skipper has also signed this Bill of Lading.

d.,.4 ..Port Ludloil 4th September,, 1?.

For C. HENRY SMITH. 1J*.'., Agents.

All of III. proeisiont .bore and on Ihe REVERSE SIDE of toil Bll.l. OF I.ADINC
• ro ••r.bj agreed to on Ihe pan ol the SHIPPER

0. BHBT SiOTH

BIT Shipper

Read Conditions of Special Contract on the Reverse Side Before Signing.

Shippers must aim in full in ink. or if rubber stamp is used the name of th. indi
eidnal signing on behalf of the shipper must be in ink.

J nil ui ninui dfC rtglCCU III uy

n'VX 'T °ny los" "' °r *"' *"■»«• t>7 Are t

r;,J.:;

or otherwise, nor fr--m in. hi ...tji.U d-(-ni i..;,
»ho poods named !•> ibis Kill ..f Lading nrr

ddivfry st any pnriir..|.,r limn ..
particular use: and shipper shall
carrier it place <-t delivery I., (hi
and prbir*. may he discharged

!.»rtleul«rCm"ltetI>olr In**" me* r/.nj
«r.(--- in OUc-h.irped nt ).ii,"h lick?.-.

B/L No._

SOUTH AMERICA PACIFIC LINE
C. HENRY SMITH, INC., Agents

311 CALIFORNIA ST.

SAN FRANCISCO. U. S. A.

• - %. BAJA CALIFORNIA

BILL OF LADING

GOVERNOR FOflirt

0. Henry Bavlth.

Ban Franc laco, Calif.

Brarian Capper Co.

Lparaiao. Chll...

Fort of discharge
Thrnufh rate to

Valparaiso, Chile,

f<om , C Haary Sal th for .u,™i (,„IO

"B*^!^?!11 of C HENRY SMITH. 1

port Uidlow,

■id C)mp»ny'n Stea

j£_

-26*304-

D£SC»ll"TION OF

»; UBukh igCK tf

Twanty-alx Thouaan

maaaura.

Ploooa Rough Lumber said to contain
FlTO Hundred Yhixiy-eeven Thousand,
Bundrad Mna.y-aa.an (i>37.n974 Jut

-I UB JgCK

Onta.ln Two Hundyd4

— Six hundred Fifty-

SIDE HEREOF AN

1 ' '■"■;".'!' ■ ; , ■ v ,f:

. . , ... I .■■!.■■ I 1 ' '

BOUND THEREBY WHETHER THE SAME BE PRINTED OR WRITTEN.

2 The Mid packages art to ba forwarded with auch reasonable dlapatch
the general business of the '"
C HENRY SMITH, INC

D. HE1JRY SMITH
[eel to all of the aald Sill

REVERSE SIDE

>laeea oo or off too usual I

i seme, or If said packages be destined beyond aald p

the saTd"nemed person, company, assigns, corporini.,., pi npiMaaUtsTBi: and freight

I i,, ... .(.' .,• ... •
eraae ahall he paid In full In U 8 Gold Coin on an; auch dellrery. and full freight
all such charge, aald paeka
». Good. In refritoratoi
roods ohlppad und.r this I

... or breakdown of machinery, insulation or other appliances

«&•? oL '

.ay other >•«« iw'tfcfflW at Hberty

charges incurred

cr,iheK «ideWgoaod"al

expenses at "port o/' d.-livtry. FrL-,ciu7s'pV»Mo~

All lighterage, from Stenmer to Steamor and/or between Steamer and shore of
named in this Bill of Lading, shall be at the risk of owner, shipper or consignee.

fragile nature, taken, only it risk of shipper. "owuer or

1. that the liability of any carrier, as to good* destined

— REMOVAL

; present lor delivery 10 him; and BKKORE RK.MOVI

part thereof
■&» wool J

ft".*"!." WJa»

not any loss or damage or absence of any part of auch goods,

c.iuld have been discovered upon makiug such tui.,i„.ii ■■„ U-C...V inking away or

removal of said packages.

13, Liability of Carrier shall in no event be greater than that provided by Sections
4281. 4282 and 42S3 of tlir, I.-,vi;,..J si.unto- of !h, U.m. J ;;i..i ■■> ■ .
■V( Di thi Conrresi oi said United States ol America, sntltlfld: "At ail i '■ tin
navigation of vessels, bills of lading, and > dm -i.li, ,i..^i,. .luliei, and rights in con-
nection with the carriage of property" — the "Harier Act" so-called — approved
February ISth, 1893. and Carrier shall have alt rights and benefits granted to ship
"•sfsSftS'ty1 °' "" "ctloV °f «id. ««■»«* Statu tea and all Ada

Stipulations and Conditions Referred to on Face Hereof and AH of which are Agreed to by Shipper

16*. It is agreed, that If said packages be hereon consigned otherwise than "to
Order" or "to Order of Shipper'' that (hie tnalrument, whether Receipt or Bill of
Lading, shall not be negotiable nor carrier required to secure a surrender hereof as
• condition "of delivery to consignee hereon named: and (bat when so consigned "to
Order" or "lo Order of Shipper," the name of the party at place of delivery to be
notified or errival shall be given by Shipper and be written hereon. If any of said
packages contain dsngerous or InUauimsble or explosive material the shipper and

•nd Carrier or its ship master may destroy any such package without liability tnanfoi

16. O. Henry Smith, Inc., reserves (he right, in the event of any trouble arising

ai the risk nnd expense of owner, shipper and/or consignee until such time as it may

Imposed on Sleamere in any tfttxlcail port, I such manifest not being

furnished In due time, or errors or omissions therein lo be paid by tho consignee of
foods. The expense of stamped paper nnd other Custom Mouse charges for landing
and delivering goods at port of destination must bo paid by the consignee thereof

19. Carrier shall not be or be held IJable for any losa of or from or damage (o

af enemies, r>" ■■■ plnOM or rulers or people,

■' '■ ",. . ■ ...... I . , ■; ,.r imiiih i(1:,l „r

page of labor. claim right tl , Bra 01 trnt«i on n>huf di

(and or pier or fire before loaded on or after unloaded from vessel, or collapse of or
destruction of or damago to wharf or pier or its covering!, not if nhip owner shall
have exercised duo diligence lo make the vessel on which said paokogea be shipped
in all respects seaworthy, and properly ma*nnud, equipped and supplied shall Currier
tu liable for any loss or damage that shall result in whole or in part from any or all
e? the following causae, to-wit, perils of (he sea or other waters, flro on board vessel,
barratry of master or crew, larceny of master or crew, rising of passengers, present
or future latent defects m Ol ihipBUnl or ,.l Hie beginning ol

ah* voyage, in or breakage or fracture of hull, shaft, propeller, fittings or fixtures,
valves, plpea, machinery or appurtenances or from explosion, bursting of boilers,
Lib veaael or other structure or object, stranding, accident of naviga-
tion, fault or error In navigation of vessel, fault or error in management of vessel
ear of its engines, winches, hoisting gesr, fittings, fixtures, ports, hatehes, deadlights,
velvet, cocks, pipes, tanks and their connectiona and this whether such fault or error
he before or after sailing or be In port or al lea; and any omission to exercise such
i BM shall not be presumed, but the same must if claimed or alleged be proven

20. Carrier shall not ba or bo held liable for leakage or wastage of contents of any
■sekare nor for breakage of or damage to contents of any package unless shipper
tret show that such package was of proper strength and in good condition, and that

Orrior and that the package was, while In possession of Carrier, so crushed or broken
n,d Id no event be liable for loss of or damage to

80. Carrier shall

"■ ■■"■■■'. i'UK-,1 i,., I,.,!. -,.,,..,;, i, i. . ,■■,,!.. ,. : ,,,.,,. ,,.,•. i: i . i,'j .... j > i - ... j ■ " ,-ii|j

nature, whether muIi [hi |.;.< r t>e i-rinripal or agent; and such
fed at any lima wltho

i damage by fire to any

wfihuil

" ■ wn overboard or destroyed at any timr> without compensation!

Ira charges, If any. !■■> ,\\ . I, ., ,,..., I,, i... . ,.:,. ,.r or u. l- .. .,,.,,.., , |,u ..,,i„U!,

'";" ''" ' "' ^'"r-idered as such by civil or inilimry nut ....rilir... must be borne

tho shippers and/or consignees.
32. Tho stenm.-r shall li« \ i- u li"n ..n Hie nuoJa for oil freight, primages or charges,

''"'I '"■ l'i»ard of HeuUh or'nlhVr 'oVi'!,..' ■'«'. ' '.'' '' , , .■ 'V ''''' ',,'''■ „'„'.'"■ "''foe"" ''"'/." !'"'ro'

1';^;';:;; ,;;'/'/,;>; ll||,i;"r\ll"d ".»y detention, dHny, rl,,,,:-,,, ei.ulties IncurrM or

l.j- thy Nluppers mol/or .■..,,..'., n-, ." Si , :i.l.*t ' or it-.' ,' s „Vr v.'iil 'n-'d'^U,, rehp ,'. ,,'Z

Z'"h'h7 "hf'! '""' "''"""''''v '."'■ .""'' "'" '"

'd T. tsmnivli *"*\X'c"£* i'.'v ft

anchored at or near to
flea be BUCh as to cauae

"i ii"' > '■' i ;111 "-1"..-

'."'.'„'.". ', ,','''',", ,. ii,.'",'!',,"; „:"',,,."]', ,. ,"" 'j' '.i,' . :...'.''' ",'',, ',','. i, '", !''.',',' ' .""';' , „"r. ',""
;;/! j;;;^ ,.|". -; ■ • '••'■ >'; '''•••.■ :. . ■'. ' '.' ' . ".'.,'" '.'.I' ",■ '."i !'.' "."',

:H:.:;-V':;;-; v;;/J;':/;'^ \'^;:'.';:V.^:v.:; 'T,!: ':;::;/;;v,v) v;"1^'^^:1'';';-}' ":;., ;:v-;l"::i|;,'l'.;i:' ''^^

1 : in." in- ..?!n .- ..-. ■-,... ,■,,. in.

hn .i'tl.'liv.'r..'' :/,',!l s . I r ' IjVi . ,"l u V ...

' bull lin |un|,,.r', (ilir.i ,[, liKTv' mi,! ;il|

shall absolutely cchsp. Iu the event o. i,JUi
arrival at port -,f delivery or i r;n ■ h, ;.-,,, .ll( i„i,,
other vessel or r.f1.pi,,,|(> ,,,,•,■ :.;urv m |.i'op,,[- fur t

<JU:i'..iil-;;«
I-' 'li: = K;.r^,.i ,,i

l> •'■■ , li.-l ..

deterioration of perishable property, stains to packages, contagion or moisture received
from such or pin . chafing, pressure, climate, heal, cold, sweat, rust

vermin, twisting or bending of metals shipped looae or in bundles, loss or damsgi
resulting from any burning or explosion of cargo, or from inaccuracy or omiasioi
of proper marks or description, or from delay, unless it be first proven by shlppe:
failure In proper loading, stowage, custody, cure of proper deliver? of said packaeea
Bach package shall hf I.. leglbl ol consignee an<

rf not so marked a delivery of full number of pack a j;.^ of lil . ; .,,,,, ,,,,! .,,, , , ,: ,,|,

out regard t-> quality or actual contents shall be a full discl.arRe of Curn.rH oi>li,-n
tlons hereunder end If any of enid packages shall be delayed or go astray or bot else
where landed because not properly marked or contents not properly described, Carrier
shall oot be liable therefor. Live stock, alt perishable property, all live freight, and

Improper custody nor want of due care nor improper delivery of or by Carrier shall be

11. Advance charges shall be repaid to, and prepaid freight shall be retained by,

nether vessel or property be lost or not lost at any stage of entire transit,
and if all freight and charges duo Carrier be not paid after arrival of vessel, Carrier
may sell said packages at either publio or private salo and as agent for and foi
■Mount of owner a ud apply proceeds in payment of mirM and all other charges, and
If sum so realised be not sufficient to pay all such charges or if such sale be not
Otade, the shipper shall, on demand, pay all auch charges or make good such defi-
ciency as the case msy be, and ship master may at any time sell or dispose of per-
., -..me would become decayed or worthless before
h could be delivered as herein provided, and if same be
freight thereon and ail charges shall be paid by shipper.

12. Tho said pscksgea shall be received by consignee at vessel's tackle Immediately
am her arrival at her ru. , ;;■ S|- ,

lighterman or wharfinger or other partv or person believed by Carrier to be responsil

Unded on wharf or beach or bank or stored [a bulks or put in llghtfri for the owr
and at owners risk and expense.

*.8- .The person who signed this bill of lading as accepting the terms thereof v.

Kthoriied by the shipper lo sign same for the ihipn |] „0Ter be Hal..

r any lose of or damage to said packages nor for anj damage or loss suffered In
apnnect.on therewith unless its negligence or wilful default be shown to hsve been
Che sole cause of the same; and if Carrier become liable for any such damage or
loss It shall ipso facto be subrogated to and have the benefit of " '
aured upon said packages. omi are hereby ant

general order for discharge immediately ship be entered at custom

lis or the masters thereof for any loss of .
err of or delay in dotivery of sold packagei
ented to Carrier or its Acent within sixty days 'mm d

bag presented to Carri
•uch loss or dsmr— -
port In distress c
Voyage shall each
presented within
have been release

Uid I

Ixly days, such claim shall be and by every court h
ihlpper and to be abandoned and barred; and no sol

claim be so present snel ill r.._> thereupon «

time ao granted

for waste, leakage, breakage.

packages, chafage i

damage from' effects of climate or decay;' or J

otherwise when properly stowed; nor for explosion o
nor from unavoidable detention or delay, and It is e

y other cargo
:les on freight

per package, and Iu
bility of the Carriers

M. The shipper hereby representa and declares that the value of each package
described on the face oJ I does not exceed tho sum of *100.o8:

mnless the shipper shall expressly derisre and there shall be written on the face hereof

■ ■ ....... Jo I said pi ■

freight thereon is adjusted.

£?. If steamer be disabled on voyage, Carrier may forward ei
«f delivery by other conveyances at option of its ship mnstor an

said psckages by servants or vessel or vessels of Carrier, such ser
paid for aa 11 rendered by strangers.

18. Carrier is not and shall not be required to deliver sntd

delivery at any particular time or to *

particular use; and shipper " "

and packages may be dtacba
age or wharf or landing.

Ive add'

-' - packages as discharged at ship's tackle"

■ selection end sppoln'
i scoured or may secun

from TCI'-hi,,,; io,^ ,1,-Ji, ,„(,..,,, ,'.',' ',,

and such Roods

,;"'' . . "■'■ o- ■. ■., '""i...'|! ■ ''','',", i'i '""„\

sre, at the ntk and expense of sbip[...r. o*i,,t ;io.l r-„„-.ii:1 „■,,, Un and any of them

the goods therci'or; loil ,|,..,.M i.i,,. v,.'s«el or c«ods

"'U"i|' .', (ill li ml nil V of III. ■•, j.rnl' lii.'i.. luml' lln-

disrhorse. at tho risk and rM'->v' of shipper i,v
them, he, and tiny |..,^i.,,: fr.o./iii u ■■;., Ihr f.ri/m:,

li'i'l f'.r nil iio'lr ill t..<l .-..-.I ni «l,-l,.-. .■, v. I ...J I, I :'. Ir

shipment to port of delivery shall be also then eo
35 "Carrier" induilis siorl, h..|.l,<rs and vessnl*

lllfitll |.iur.|o-, ill,,) all OV.II.T , ,,f ,. j,i ,,i,,-|. .,,-,- •. .

Carrier: ''Owner's risk" and "O ft." tm-.u. ihnt
shall not be Hnblo for any h.,.i „r , I, ,„.,,.,, U11|. .... ,,
from Its negligence or wilful defnnlt.

■'■'■■ •',,, ri.-r', I tn.l.iliiy Iu f, ,,,,,( ■. : |,.,|l

ivery shall be paid
lcf[ dlichorce

'■ ' ■■ •■'■' " :■' 'I" "M. i iu- L .

!.ortUMf di'",'i!a"^l>; m',,,1 ,1i'i,';. .

n.l.;i,t o„ d-livVrv i».:i,e i l,,,i',H H l»,i-. „,;„i,. delivery" as a"l

eight be prepaid lo ,-.„tu-i l-v 1 ,,ui,l lir t „ li -,i |(h,,(. „,

be Shipper s agent for pn.tu. „l lo otln-r carrier of such freight

l'"Mwmrs"

Hint r.in'ii'r

oly resulted
end and Ita rights

...ii i.-., '■...■ ,1 '..„'„ -t' ,.'.'r!

fcr.rrir-r8thallPbok"iCnl.\^rllkrieiyl

rriiiihurK.-l lo (.Tirrior by cousU,-neo°
) paid by

on. aii expense oi cooperage ana repairs of packnCes shall bo paid by ehipper

lhe4°mcr!hand?«"Xr^ "!;" > ''' '"

werehou's/ lm"n l-,'"!."1' ''''"' "<" " h ""1'| " :" j' ''" l'1' h';' ''' ■" '''l'i: '' "'''" " ' "''rt.'"or 'i

evStTi^fi:,C;i',:;Vi:£

r,':U:' i"L.,r',in "J.1 n:'",,i,r ^"'""". <>•<■ i i. ■..,..;.'.■ ii,. ,. ..'„',' !yjw. <','' ".'.,', "„'",'. ;;

ehouse awaiting shipment,
■tf " "S* h' i°SS °^ dBma'je by fln?' fl'""1 attd/oi

whUe'*"" '

.miiBO to '«oods li.„

lofldlng the same therefrom, unlcB, euch fire

■eaworthy, and to have I

•"..-..ces, or from unBeawortliinosM. wh. Ihcr ...

in* at the time of shipment or nt lh.- h. ■,.-.,.,,,,- f i|1(. v. .vat-' (i.r..vnlr,l il.. I

'!"" •■ ii"";- ■, , >■•'!>» n-l .li-.-ov,.r.-.l ..r .li,,,,vurable by the exercise of

the owner kb., 11 i, hai,l,. ih..,,-f..r. bin The ...n-.icneea or owners of

II. nevorthe fli, pay r,.Ka-.., and any special c'

...n.n.il 1.'. tin ,..,-,,„,..,, I . . . : . - I , I . ... |„ ..l.nvn (In

nlrini-nc, .liininp- ■ .Inn-ni li . . I , ,. , 'i rc'iil.'-l' [>!'„,"'.!■''

Intent defect or

d.ma Ce'*,ttd«l«r7*

.'':;,. •

."■■ -I.... -.--■■"-■.- ..-ii ....i .... i.-.

such ftunlnllnn.

"■ ' -.■' '. .

e responsible there , t . ., , , ' '' ' ' ''n'"

......■: ... .... ..,;..;,; „l".;;;.v,'i;. .,..:';'".,;-.l;.'.;; ,;;'■„ :■;;,:.::[,„:: ■!!, '■;.:,;;:". .::. "

i^ctSKirSh".;"' j:.' r,'...' '■ i: '"'.',:!,,■'„,''' ,'".' 'V !.-,,'.?' ..V'".,,',. ;.'".■„ ,-'.,i"„ ( ,- ;.

id"otheV eh.fjet'a'nd'.n «IMn>>>°OI*!rI«- ".',"'..'.'. ' i "i ",'. !

.. , ..,,, :,;,,, /..r ^;Jrh„.„J„ ..f ..,., erl A.B.1 maybe reasonably

B/L No..

•. «. »AJ» CALIFOHN!

SOUTH AMERICA PACIFIC LINE

C. HENRY SMITH, INC., Agents

311 California St. San Francisco. U. S. A.

BILL OF LADING

Voy. a

«. M*n«y

Ban fiuilin,

Calif.

Order/get. Jorge j. >m< y Cli
Arioa. ChlH. ia tnailt

tO B»llTl»

Fort of discharge
Throufh ratt tn

Arloa, Chile, In tran.lt te BollTla,

DESCRIPTION I

. 1.229_

7,»*0

*fc

Board Measure.

/ -J OH DECK
Beren Thousand, four Hundred Jorty Pie
Rough Lumber said to contain On* Hundro

j One Thousand, light Hundred fie* (
Pieces Pressed Lumber said to contain

! I ■ ■ ■ . . < 1 ■ >

■ , ... ijk

CONDITIONS HEREON AND ON TUP.

' WHICH PRKIOHT KATES ON SAID

SAID PACKAGES i:: : i

•MICH TnE SHIPPER H.\

ID EVERY HOLD U 01 ALL HE HELD

BOI.-VK THEREBY WHETHER THE SAME BE PRINTED OR WRITTEN
I The ul

c.'b'bh'bt «m t i

irct u> .11 ol the said Slip.il.lio
hereof, lo the nor! of dc.tiu.li__ __

■ » ■„-.,, , ; ;• .,.1, I... :.

to sail without pilots, tow .ud ...lit Teutl.. deri.te. I
l.od and rc.hip uid pack.se. or .117 II.t. ,r. _„,! lo ,

r"'Sl'iJ«.°l'.Cri.ck'__. ".'nif °""ike Condi

Good, in refrigerator. Steamer .hall

•f the uid named person, company. .Miens, corporation or repr.Mnl.Ure.: end fr.1
■ t ier.IT rat.-. (unlr<. olhrrwiie .rreeJl and .11 charm .dv.need by C.rricr. ,
•Ttrui .hall be paid in foil in U S Gold Coin on .n, such delivery, .nd full frej

•II asd

joUiaoo the whi

to any package, after

42. BO

.PER 2000
_P__R 2OO0

Loaded at Mill*

7617.

I 7C11 .75

11. . Il .h.ll be lb. duly of Ibe Shipper. Conairue,

eiamlne the uid ._ck._.s BEFORE REMOVAL by
- " -" " , in • dam.red conditio,. 01 shall

nd ,. failure

Ined he i

iv„rxi

REMOVAL by I,

dlli.n hi .! .,:,,. ...■: ., In; I

,0 him; ond BEFORE ttl.v, I. | .1

be concluti.
»nv loaa or damage or absence of an* part of auch
,r.l of .aid packages.
1. Liability of Carrier aball in no eyet
.nd 4283 of the "

dine and that there «.,
which, if It bad existed
before taking away 01

-at provided by Section,

Act of the Conir.as of uid United Slate, of America, entitled:

narration of reau I, ... ladle , and certain obligations, dutli

ii.ctn.n wilb the cornaco of property" — the "Horler Act"
February 13th. 189a, and Carrier .b.ll'h.., all righta and ben

bllily. together with, lh! benentTf .IMt.

hssihtf 1,,,,.,.,. 01 ,, nalttlDJ ■ limitation of auch
18. If the owner of the Teasel

granted to ship
place where claim hereon

hereby .creed

Mesieo or Centr.l American Reoubllco,
due diligence to make

■speels seaworthy and properly manned, equipped and supplied, It
of th" "Bo ° *,r' ""■«• or dlaaaler resulting from fault or n.gl

ce. th. consignees

. voyage, or during th. eoyace, 1
or owner, of the carco .hall not

ln(
but

r any such apicial ch.rcra ■■ If aueb dancer, damage
auch fault, negl,. .„, , nor, E ...... e >r oiler defect.,

effect.. If sny. not to contribute in Oencr.l *,,•-_.-,,

inn claims tor p.s.cng.r.' effect, Bacriflccd to be allowed II I , .;,,.,,. i

their proocr contribution in .urn .:>.. Gener.il Average ;._.... ^■online to York

Antwerp Rule, of 1800. OR OTHERWISE, aa CARRIES intere.tcd .hall alert

14. Tie carrier, charterer, scent and/or owner of the ressel shall only be required
to exercise due diligence to mat, lh. r.s.el ...worthy at the time of .hipme.it. com

'■ Uligenc. h>. be.n used

manned, equipped, and

•upplfed* nehher'tho

iiei, ownur, ecenls.

Id nipontlbte for damage or lose reeulling
ag ol boilara, breakage of thefts, machinery
all, machinery, boilera. ^Ktcing , gear, tppurtei

j£S?

one 01 wnicn din. oi Lading being aeeomp
• Shipper hat alto signed Ihie Bill of Ladin,

Kor 0. HES&Y SMITTl, INC.,' As«f.i

*?,

on the REVERSE SIDE of -fhls BILL OF LADING

. on lb. part of lh. SHIPPER

I In Ink. er if robber .

ihg

c-j

§ i i \i

111

Stipulations and Conditions Referred to on Face Hereof and All of which are Agreed to by Shipper

15. It li ecreed, t
Order" or "to Order
Lading, ahatl not '
a condition of dc!

If said persists be berec

Shipper' r thai this inatrut

jlieble nor carrier required

* condition 'of delivery lo eonshjT.ee hereon named;

of Shipper," -the rune or the ,

notified of arrival shell be fWen by Shipper end b« wrllten hereon. If en
package* contain dangerous or Inflammable or explosive material the shi
eonaianee ahntl each be liable to Cdrrier (
and Carrier or Ita ahlp matter may destroy
10. 0. Henry Smith, inc., reserves the
between the Company and any of I bo Cem
at the risk and expense of owner, shipper

and damage resulting therefr
without liability therel
at of any trouble aria

r>od». The expem

and oHvanng goo

Hi', V.! I

btioalion muit be paid by
E a* such in the under right

io paid by the consiem
House charges for lei

land or pier 'or fire bel

have exercised due diligence toHmaka

bo liabie'For any

worthy, and
OH or damage mm
Mowing muses, to wit, perils >
rairy of master or crow, larceny o
future latent defects, whet'

said packages be shipped

I,;::,-:

:.r? ;

fracture of hull, i

valves, pipes, machinery or eppurtonancce or from explosion, bursting of boilers,
Ita vessel or other etrneturo or object, stfandlng, accident of nav^a.
tlon. fault or error In unvia-ation of vessel, fault or error In management of vessel
or of ita engines, winches, hoisting gear, fittings, fixtures, ports. halchei, aeaallfhtl,
lives, cooks, pipes, tanks and their < one, fault or error

du* diligence shall ■

20. Carrier shall
lof for bi

Sy "packed Ptber
that tho package was, while In
auch loss or damage; and In i
ntents not specified herein, not

!;".'!::.;

any soch contents not apecifled herein, nor for loss from package or damage to prop-
erty shipped in tierces, crates, sacks, bundles, bales or which shall consist In whole
or In part of glass, crockery, queenaware, porcelain, hollowware, pictures, picture
frames, stoves or other castings, not for breakage of castings not cased, decay or

"m of patiihfibli i m i I i molitura received

.,r oilier freight, effects of chafing, pressure, ollmato, heat, -cold, sweat, rusl,
rom any bnrning or explosion of cargo, or from inaccuracy or omiasion
marks or description, or from delay, unless It _be first proven by shipper

propor loading, si o watt*-', custody, cire of pr.
,i ..rl
larked a delivery of full number of packages of like supp
full discharge i

hall no

■
mproper custody r

rounder and if any of n.n.1 i . ■ .11 ,■•■ ii.-layed or ro astray

nded because not property marked or contents not properly described. Carrier

. -. ---ck, all perinbM.1.; (oo1Htiv. r.ll live freight, and

fault nor failure nor Ini] t< 101 DM utowarje nor

t of due care nor Improper delivery of or by Carrier shall he
If alleged be proven by shipper.
81. Advance charges shall be repaid to. and prepaid freight shall be retained by,

■''■ ■ ..!..., ,.. ,I:V ,.■ .-> 1 if .„:■ ,!,

and if all I. •:■■ ,,.,| ;;lnl.| after iirrivsl of vov.--.-i, Carrier

may soil said packages at either public or prlvote anle and as agent for and for

. if sum so realised bo not auAleient to pay all such charges or if such sale be not
Dade, the shipper shajl, on demand, oav all such charcea or make a-ood such defi-
ciency as the case may be. end ship
Ishable property when In his opinio,,
II could ba delivered as herein provided, and if same
freight thereon and all charges shall be paid by shlppi

38. Tho said packages shall he received by consignee at vessel's tackle Immediately
on her arrival at her said place of delivery without

or bank or atored in hulka <

23. The person who si
anthoriiod by the shipper
for any loss of or damafi
connection ti-
the sole cause of the asi
loss it shall Ipso facto be subrogated to
cured upon said psckagea. - "

■general order for discharge

24. All elalina of ahipper or consignee or other parly
' ,ny loss, of or di

i
. _. subrogated I
packngea. . Collectors i

.'..'V . h"'i',M''

'i3jF

tall In i j of said packages or any thereof shall be In writ-
ing presented to Carrier or ils Atent within sixty days from dnto of notice uf uuy
such tosa or damage, etc , and arrival of vessel at port or place of delivery or at any
port in diatress or earliest newspaper mention of loss or stranding of such vessel on

been released by shipper and to be abandoned i
claim so preaented or to recover for any such
italned. unless such claim be so presented and sui

..... ..-,.■ .

the time so granted therefor; and every i

do. shall be ao held to h
signee, and to bs abandoned and barred.
15. All liability for loss or damage 1

leakage, breakage;

i written on the face hereof

understood that )h^ Slonmc-hip Company in

kage; Insecure packages, chafage to goods in b; ,

■or for loss or damage from effects of climate or decay; or caused by other cargo
til stowed; nor for explosion of articles on freight
•r otherwise, nor from urn irasaly agreed that

the goods named In this Bill of Lading are hereby valued at not exceeding 9101' "
per package, and unless a different or other i ilu
herein, the li J loss of all

-.Id goode from any cause, ehalpnot exceed 8100.00 per pockage, and lu
ease of the partial loss of or damage to any of said goods, the liability of tho Carriers
shall not exceed such proportion thereof per psckage as tho '
psckage shall bear to the sum of 8100.00.

86, The shipper hereby represents and de<
described on the face

,,..■ shipper ahall expressly declare and tl

i unon auch basis of valuation oi earn packages, ttie rate c
freight thereon is adjusted.

27. If steamer be disabled on voyage. Carrier may forwnrd said packages to poi

ai delivery by other conveyances at option of Its ship master and ahall receive addl

iini.nl compensation fur such service when rendered and whether performed by its

U or those of strangers: and If salvage services be rendered to shipper or

servanta or vessel or vessels of Carrier, such Bnrvice shall be as fully

paid To! a* If rendered by etrengers.

38. Carrier Is not and shell not be required to deliver snld packages at p
delivery at any psrtlculor time or to meet any particular market or in time fo
particular use; and chipper ahall notify consignee or other person or forward.. _
carrier at place of delivery to th*re receive packages as discharged at ship's tackles,
tad psckagea may be discharged Immediately on arrival of vessel a1

•f due care by Carrier in tho selection «f its agents and aoporint
attention to their duties and their selection and appointment of

r hs'v. J

80. Carrier i

31. The shipper shall be liable for any j
wharf, caused by inflammable, explooive >

- —are, whether auch shipper t
overboard or -;,
fo? dl«iL '

by Are to any of
o without compen1

le, e

tether auch ehipp

Extra charges, if any, fof discharging. Ilghterngo or "olher " cxp.jt.w-e on" liu^r.jo'us

goods, declared or considered as such by civil or ml , mut be b»roe

by tho shippers and/or consignees.

iteamcr ahall have a lien on the goode for all freight, primages or charges,
ail fines or damages which the steanur or cargo may incur or suftW by
e illegal, Immd or intmflicieut marking, numbering or addressing of

>■■ ■■' "" ■ "' ''' " '"'"" ' ■ " ■ ■■■ "' '■■- <• i ■ ■

■ !l" '" ■ :..,.. , . , ,,|;-r iiuth'-'-.lifS.

certificates requind to accompany the ^oo.i ire

sular, 'Board 'of Heasfh of

to be produced by shippurs, omi , ..M) ort.-.ii.m, 0.:!-.;„ ,-l,;.rg. ■! or penslties hicun
ing to carRO or itennuy ow/IDfl i" IB ... ,■ BgtlBeatesi are to be

- InppiTi. ::nd/-..- c.:iisilTiitr-;. Sl-jTr.r ..r .!. ,.v,ii,t will not bo reap'
. „ lay in the delivery or in Ilo.- . .tr . in .,:.,- „f i;.>uds d it plainly marked wil
purl of il-MiiiMnii, und Ih - name and address of the consignee.

33. It is expressly stipulated that if said packages need to bo lightered h
io or pert or place, all h-hicrn-e cervices remb-rcd rhnll be and bo deemed to
... r-ii-.liT.-d !■>■ in. mdr j.. ■:,. Inn r: rri. i- or (■.[■■in; il ao.li (,cr vices bo pr-'i.^r.
rr'.ci Hi.-', sh;ill I.,' <l.,oirl l,i I.,- nnil to have bf. n r.o prfi?urL*d by ft »Cti

.t:;: :;',;::;,

ion off the neumi ' ■'■ ■■

.MO, hulk, li;-hl.T or other

hal^bo "rupe'r* u'n!ll "j.'ii v',

: i-.agee after

r ses bo such aa to cause

1 ' l

r nny other nvulal,!,. port

;cusc, and suc'i uit,-.l..i -;o

ods may bo d, ., 1. ,
■: d.-pot. hulk, lighter, or

;!,.■ . .,., i-,.. , if ,. ,,.,.-'.

i.tui'-- ii,;s tiiii of' Uiui'i.!'. ii'id ','o'h \".., .'a' .'i,,,'ii' i.,.' i,.,,,!.. ".!;',',

reaching her dentinal \-n, or raalim, due do!i.._-ry of tho
(me. i he (-o.,.l:i may bo fi.rthv.nh, .nlioul previous notice
■c, di:eh.ir,-«ij into tlefols, luKflrettes, hnlks, crofts or

li; ■ ■ ■ ■ ■

fndliip as soon o» tbo goods are delivered from tho ship's tackle, and nil rxpent,.-:i
lher-hy or tliro„ri,-r nn.nrfid .1 all increased cost of such delivery shall bo paid

ihiin'er, O'v.ier nod run i^n-.e, all fu.d any of I bo in. the Carrier retnlninir a lien -i
i I. Honfor; hut >li..ol.l iho >r .-.-I or j-oods not he j.lnail led, or sneli .|j . h i , ■

HnHiF1^''

m/inB

;;;:' ;;,:

;1%

'h!,i'i'i. ..: '.

wrifaV

able by shlppor whoilin ; .io li oili.r turner's V.-,sel
lost or not lost ot any stage of entire transit; — in c:u
misdelivery or conversion or loss or dumago unless i

87. The rights and liabilities of all carriers by wo

if turner d.-liwr n.nd p;ickaces to other carrier for
mode as shipper's agent, and not as earner, mid if
by In nd, or by water, shipper n-n-ei m bo b oind by

transfer or by such cirri. t for like imnsfer or enrringt

38. Carrier shall have a lien on anld property for

all expense to it le-uUm n-..in :■ ti i | T" -r ' m fnihire to fi,.

House pupe.rs in due lime ,,r r.^iitiinc from other e

Slid nil KUeh flues nod eM.eo:,..< i I, .,|| I,,- leiiot. urff.l lo

[ir,.pert> (.hull he delivered to him.

89. All expense of cooperoge ond repairs of packui

.r omi-M.ins of shippers.
by coQsisnce hef.,ro ;;u.l

; I. ... I. i. I,,.., II,,,.,!. ; ...i'

\s:r

nluading the Bamo therefrom,

ised due diltEenre (o miike

l>r..[.,-rly inni.n.il, o.iiii;......! n

r, domnire or disaster result!

Ill

defect or unfie.worthlnews w;,f ..... .11 ...... r.-. I ... .h n.1,1.. by tho e\er,-ise ot ,t..o

.lili-.-,,...). Hi,. .u..i„r ..I,., II not I..- llnl.li. il„,,(.„, I, „, ,.,„ .„■„,.,. , „, „„•„„, „, „,.

" .' ''I ". I. . C.. .!:,.!,. ,.,.). 1, :.,,.: , ,

"' ''"' Vir,;" :'.:!.:. II .....t,.|i,..(,. .Mil. II... w,,..| ii. >:. ,,, , t \-:. >:,-.- t„ tin- I . . l J- -

' ". ." : ' ..." ■ I" " • il ...

' ' P.' Ill iill villi Ih,-. Mini... f.'r. ,1 ,lf,..l, .,„,! [,, 11.,. H,;nn„ r.-tcni. n* i"l '-l.ll

danger, diirnftL'e or dlsnslcr li.nl nut r...:.ili...l li.tn ,.r !., ecu ni ,1 l.v fuilu

i. iio.mat.on or In the management of tho vessel, or any latent defect or

48. Also that In case any sler.mcr of the Carriera under this Bill of Ladlns ha

"",".,,'" !. '■" ,i .'.'. .' ,;,"" :',". ' ,!:,',; '" ■,■,';:;;■.■ ' ,'':; ",';; ; ' " l( '■ ■'■

I J^„ ZleM n',*,"'/." 'h5"< \°7. ' ,HT Wl1". I"'' S In thli Bill „f

Ln.Uni for all arrnnr»se» of froirht and rh,,,., ,1... 1,, ,1, ,„, „„,.,.,< or ,. „,si-:t„ ..
on other mods l„ ■>■ ... I ,,,:„,. I, mare In the r-li, ,., ,

ei.atod, thev",.,11" ' ... , \[" u,"y „ ,.:::;"" '",[;., .',';;;, ;,:"', r,,,,-,;1,,1"

be re.pon.ibl. therefor. The re, ,, ... ,i ,,..,,,

evidence Of the condition in which he received ,h-,n In a Bull aealnil any olh. r ci.rrur

The CarrlVr hav1iiit'l6fi*h0cnrno P*rt lhBr*?i la retV., d (,, ,h, , ,,,

i..i ■ ,

or effeetlnn reahipment of such cargu. * v

ipon and njtainst said •

vs. A. O. Lindvig. 189

(Defendant's Exhibit 4-S will be found on page
75 hereof.)

Defendant's Exhibit No. 5-B.
"PRIVATE.

"Kristiania, October 12th, 1917.
"C. Henry Smith, Esq.,

"San Francisco.
"Dear Sir,

"I refer to my letter of 4th inst. and have since
received your cable of 5th, asking whether I would
be disposed to sell my interests in the ' Pacific'
and ;Baja' Company, which, howTever, I am not
inclined to do at present, which I telegraphed you.
"I have also received your cable of 6th, sent via
the Legation at Washington, reading thus:

' Regarding your cable to Hvoslef that I
closed contract against instructions stop this is
not correct stop refer my telegrams and your
letter July twelfth,'
— to which I have had to reply as follows:

' Your telegram 6/10 stop you never replied
to my cable 10/7 that contract fixed accord-
ingly stop consequently my telegram to Hvoslef
correct stop cabled Hvoslef again yesterday
confer him.'
"When cabling, it is rather difficult to go into
details, but I have now7 gone through our corre-
spondence so many times that I find there can be
no doubt about the fact that you did not cable me,
in reply to my telegram of 10th July,x) that you
had closed the contract. Put yourself in my place —
what would you think if I did not cable you what I

190 C. Henry Smith

(Testimony of John A. Bishop.)
was doing, when you might have been awaiting
some important reply? The fact that you did not
reply is untilligible to me. I really hope, for
order's sake, that you will go through our letter
correspondence, in which I have confirmed all the
cables exchanged, and I cannot but think that you
will then understand my position. Fancy, I re-
ceived your letter of 24th July, in which you send
me copy of the nitrate charter, about two months
after it had been written. The letters, which I
wrrote you during that time, will clearly have shown
you that I had no idea that you had fixed any new
contract.

"Yours very truly,

"A. O. LINDVIG. [157—135]

"P. S. — In case you had telegraphed me that
you had closed with the reservation as mentioned
in my cable of 10th July, the contract would have
been in order."

On the inward voyage of the "Regulus" I
shipped 1000 tons of coal belonging to me to the
South.

Q. At the time you said you had shipped it $2
or $3 under the market rate.

A. I didn't say that positively. I could not re-
call. It is a matter of two years back.

Q. At any rate, on the date of the shipment the
market rate was above the rate at which you had
shipped it? A. That is correct. * * *

Mr. MOORE. — Now, what, if anything, did the

vs. A. O. Lindvig. 191

(Testimony of John A. Bishop.)
circumstance that this was the first voyage of the
"Regulus" have to do with your going* out and
buying and shipping 1126 tons of coal on her?

A. Because the freight was very hard to get;
was very scarce at that time; and I did not know
when we would get the steamer from the shipping
board. That was very indefinite, and then finally
when the shipping board gave us permission to
take the steamer they gave me only 21 days to load
it and get it out of here. So that time was very
essential to get the steamer away because I was
very anxious. I thought that the shipping board
might change its mind.

Q. Was or was not the agreement that you en-
tered into with the Shipping Board dated March
30th, 1917, whereby they were to permit a transfer
of this vessel to the Norwegian flag conditioned
upon her starting on her first round trip voyage
of three round voyages between here and Chile and
South American, within 21 days after March 30th,
1917? A. Yes, sir. * * *

Q. Well, now, outside of those two items here,
one shipment of gasoline by you and one shipment
of cement, were there any other commodities that
might be classified as general cargo shipped by you
on any of these 26 voyages where somebody else
was shipping the same commodity, leaving to one
side the lumber now?

A. Yes, sir, there was the "Sinaloa" 9. That
was apples.

Mr. MOORE.— He shipped 40 boxes of dried
apples on the "Sinaloa" 9 at $27.50.

192 C. Henry Smith

(Testimony of John A. Bishop.)

The COURT.— What date is that?

Mr. MOORE.— September, 1917.

A. Goetz Brothers shipped merchandise at
$26.25.

Mr. MOORE.— Q. Goetz Brothers shipped mer-
chandise at $26.25?

A. And another time shipped machinery at
$27.50.

Mr. MOORE. — That would not be the same as
apples, properly speaking. [158 — 136]

The COURT. — Apples are pretty good machinery
for the stomach sometimes.

Mr. MOORE. — I was really referring to where
somebody had shipped some commodity, not of the
same classification.

A. I don't remember any case except this gas-
oline.

Mr. MOORE. — Except this gasoline we have
spoken of, voyage 9, and the cement of the "Regu-
lus," voyage 2? A. Yes, sir.

Q. Do you recall how many shipments of cement
you made all told? A. Only one.

Q. You only shipped cement once on the whole
26 voyages? A. Yes, sir.

Q. Nowr, in respect to the lumber, I will ask you
to look at "Regulus" voyage 1 and tell us what
lumber you shipped there and to what place and
what rates you paid?

A. I made one shipment to Arica.

Q. What rate did you pay? A. $30.

The COURT.— $30 a thousand or $30 a ton.

vs. A. 0. Lindvig. 198

(Testimony of John A. Bishop.)

A. $30 a thousand feet board measure.

Mr. FRANK.— April, 1917. What port?

A. Arica.

Mr. MOORE.— It was this "Regulus" voyage 1.

Q. Now, will you state what other shipments of
lumber were made on that vessel, and to what ports
and at what rate?

A. One shipment by Thane & Company, $32, to
Mejillones.

Q. Was Mejillones a regular port of call?

A. No.

Q. Was there any shipment of lumber made to
a regular port of call on that voyage by anybody
else?

A. Yes, sir. There was one by the Mohnes Com-
mercial company to Callao.

Q. At what rate? A. $30.

Q. Now, take the "Baja California," voyage 6,
and I will ask you to state whether you shipped
any lumber on that voyage, and if so, to what port
and at what rate. Is a rate to a port not a port
of a regular call higher than the rate to the ports
of regular calls? [159—137] A. Yes, sir.

Q. Well, she sailed March 6, 1916. "Baja Cali-
fornia," voyage 6.

Do you care to look at these, or would I ask him
the question?

Mr. FRANK.— All I want to do is to get the
details in.

Mr. MOORE.— Q. Show him your shipment first,
Mr. Smith. Now, I will ask you to state what ship-

194 <7. Henry Smith

(Testimony of John A. Bishop.)
ments of Lumber, it' any, was made by you on the
"Baja California" voyage 6, sailing from here
March 3d, 1916, to what port it was shipped by

you and at what rate?

A. One shipment to Arica.

Q. At what rate? A. $20.

Q. Now, what other shipments of lumber were
made on that same voyage, and to what port and
at what rate?

A. To the Mohnes Commercial Company, $22.
One shipment.

Q. And to what port?

A. Callao, one shipment at $20 for the same firm.

Q. And to the same port? A. The same port.

Q. One shipment?

A. One shipment for Grace & Company, the same
port and the same rate.

Q. That is $20?

A. $20; another shipment for Grace & Company,
the same port, $20. Then one shipment for
Balfour-Guthrie for Talara Bay, $21.

Q. This shipment for Balfour-Guthrie at $21 to
Talara Bay; is not Talara Bay an outside port of
call? A. Yes, sir; it is.

Q. Now, I will ask you in respect to the "Baja
California" voyage 10, whether or not you shipped
any lumber on that voyage, and if so, where to, and
at what rate?

A. One shipment to Antifogasta.

Q. At what rate? A. $30.

Q. Now, were there any other shipments?

vs. A. 0, Lindvig. L95

(Testimony of John A. Bishop.)

Mr. FRANK.— Q. Whal dale is that? That is
"Baja California." What is the date of that?

A. May, 1917.

Mr. MOORE, — Q. Now, what other shipments of
lumber, if any, were made on that voyage, and to
what destination, and at what rate;?

A. One to Callao by the Mohnes Commercial
Company, $30. One more for the same firm, $30.

Q. You made one shipment to Antifogasta at $30
and they made two to Callao at thirty.

A. Yes, sir. [160—138]

Q. Now see if you made any shipment on the
"Sinaloa," voyage 8, and if so, at what rate and to
what port? A. One shipment to Ariea.

Q. What rate \ A. $30.

Q. Now, what other shipments of any lumber, if
any were made on that voyages, and to what port
and what rate?

Mr. FRANK.— Q. What is the date of that?

A. April, 1917. One shipment for the Mohnes
Commercial Company, to Gallae, $30.

Mr. MOORE. — Now, Mr. Smith do these two in-
stances where you shipped the same commodity of
general cargo for the same voyage as other shippers
shipping that same identical commodity, and these
four instances where you shipped lumber on the
same voyages as other shippers also shipped lumber,
comprise all of the occasions out of the 2(> voyages
when you happened to ship the same commodity on
a given voyage when somehody else was shipping it
also? A. Yes, sir.

196 C. Henry Smith

(Testimony of John A. Bishop.)

Mr. MOORE. — I would like to invite your at-
tention, your Honor, to this statement. It shows a
shipment of lumber to the same port by Mr. Smith
and other shippers throughout the period without a
segregation as to the same voyages. These four in-
stances already being given being the only ones on
which it happened that he was shipping upon the
same vessel as other shippers were.

The COURT. — He has already covered this.

Mr. MOORE. — There is only one feature of it.
I want to ask him one question on it. This one ship-
ment I wanted to invite his attention.

Q. You made a shipment of lumber upon the
"Regulus" voyage 1. That is this first trip of the
"Regulus" after she was transferred by the ship-
ping board. You made a shipment upon the " Reg-
ulus," voyage 1 — no, pardon me. It is the " Reg-
ulus" voyage 2. You made a shipment upon the
"Regulus" voyage 2, September, 1917, to Valparaiso
for $32 a thousand, did you not ? A. Yes, sir.

Q. Well now, as a matter of fact, Mr. Smith, was
that one shipment above or below what would have
been the existing, going rate for new business or new
lumber offered at the time of the sailing of that
vessel ?

Mr. FRANK. — What do you mean. Have you
any destination?

Mr. MOORE. — No, no destination in my mind. I
will put the question this way.

Q. Was that rate of $32 for lumber a thousand to
Valparaiso above or below what would have been the

vs. A. 0. Lindvig. L97

(Testimony of John A. Bishop.)

going market [161 — 139] rate on lumber at that

time where business was freshly offered I

A. The going rate at that time was ^32 plus 25
surcharges.

Q. Now, did that $32 include a surcharge ?

A. No, I made one shipment that did not include
the surcharge.

Q. Well, see if that is the shipment, that shipment
to Valparaiso? A. Yes, sir.

Q. Now, I wish you would explain to the Court
and jury how it is that that shipment of lumber to
Valparaiso did not include the surcharge"?

A. Well, this lumber was sold in April. The lum-
ber was sold by me in the month of April.

The COURT.— Q. 1917?

A. 1917. And it was booked to go forwards on
these steamers or on the "Regulus" voyage 2, June —
July shipment. The contract is here of the book-
ing.

Mr. MOORE. — That does not explain to me how
the shipment did not take the surcharge ?

A. Well, because it was booked before the sur-
charge went into effect, and it did not take the sur-
charge.

The COURT.— Q. What was this surcharge?

A. The surcharge was on account of the war rates.

Q. Imposed by the shipping board?

A. Imposed by the higher price for the voyage
and other prices.

Mr. FRANK. — Just practically an increase in the
rate, wasn't it? A. Yes.

198 C. Henry Smith

(Testimony of John A. Bishop.)

The lumber shipment was sold to the Guggenheim
interests. Before I sold it the Guggenheim inter-
ests had asked for competitive hids, and I was the
lowTest bidder. After they had purchased from me
the Chilean Exploration Company (Guggenheim in-
terests) were not interested in the space. They
wanted to see out C. I. F. price; that means they
wanted the stuff delivered in Chile, and I sold a
cargo delivered at Chile. With my cargo on board
the vessel was full, and that shut out other cargo
that was offered.

The rate changed between the time I had assigned
this space to myself and the time the vessel sailed
from the port. [162 — 139] Arica is one of the
regular ports of call, and Valparaiso is another.
Arica is about 2,000 miles this side of Valparaiso.

The witness is then shown two bills of lading, one
for Voyage 1 of the "Regulus," containing the coal
shipment, and one for Voyage 2, containing the
lumber shipment.

The material part of said bills of lading is the fol-
lowing :

Shipper, C. Henry Smith.
Consigned to the Andes Exploration Co., Valparaiso,

Chile.
The amount shipped is 60,518 ft. B. M.
The rate allowed is $32.00,— $19,036.58.
Date of shipment, Port Ludlow, 4th September, 1917.

The other bill of lading is :

vs. A. 0. Lindvig. 199

Plaintiff's Exhibit No. 7.
Shipper, C. Henry Smith.

Consigned to Braden Copper Co., Valparaiso, Chile.
The cargo carried was 751,350 board feet.
The rate, $32.00, or a total of $24,043.20
The date is, Port Ludlow, 4th September, 1917.
The total amount of that freight is $24,043.20.

(Plaintiff's Ex. 7.)

Q. Now, Mr. Smith, I showT you another bill of
lading on the same voyage, of the same vessel, and
ask you if that is a shipment made by you?

A. Yes, sir.

(The bill of lading is offered in evidence.)

Plaintiff's Exhibit No. 8.
Shipper, C. Henry Smith, Consignee,
Order Not. Jorge D. Payot y Cia, Arica, Chile, in

transit to Bolivia.
The port of discharge is Arica, Chile.
The amount shipped, 179,241 board feet.
The rate is $42.50.

The date is Port Ludlow, 4th September, 1917.
The total amount is $7,617.75

(Plaintiff's Exhibit 8.)

I was paying at least the market rate on that
$42.50.

The witness is then asked to figure the difference
between the $32 rate and the $42 rate on freight on
the tw7o cargoes, and says it is $8,524.61.

In the account " Governor Forbes" Voyage 3, to
San Francisco, [163—140] September 14, 1917,

200 C. Henry Smith

there is a charge of 7%% inward freight that means
inward freight on the " Governor Forbes" $28,-
637.73. The amount of the commission is $2,897.02.

The witness is asked to take those figures and tell
us what the commission must have been on that
freight at 5%, and replies that it would have been
$1,931.89.

The difference between that and what I charged is
$965.93.

The witness is then referred to the same account,
the voyage No. 3 of the " Governor Forbes/' Septem-
ber 14, 1917, and to the charges therein of 7%% coast-
wise freight, $2,562.88, commissions $192.27, and
asked to figure out what this commission would
amount to at 5% and deduct it from $192.27, and he
says the difference is $64.08.

The attention of the witness is then called to the
"Sinaloa" Voyage 7, Statement 14, dated San Fran-
cisco, February 1, 1917, and to the charge therein of
7!/2% on coastwise freight, amounting to $9,324.03,
commissions $699.30 and asked to figure the commis-
sions that would have been payable on that amount
of freight at 5%, and answers, "The difference is
$233.10."

His attention is then called to the account "Baja
California," Voyage 10, Statement March 23, 1917,
and to the charge therein of 7%% on coast cargo,
amounting to $4,326.88, commissions $324.52, and
asked to figure that at 5% and give us the difference
and says the difference is $108.18.

His attention is then called to "Baja California"
Voyage 11, which shows a charge of 7%% commis-

vs. A. 0. Lindvig. 201

sion, $28142. Figured at ,V, it would be $187.62,
or a difference of $93.80.

Counsel admitted these figures were correct.

Defendant then testified that the total of the above
difference in commission, that is, the difference be-
tween what [164 — 141] — he charged and 5% is $1.-
479.37.

Plaintiff then introduces a letter from plaintiff to
defendant, under date of December 21, 1917, which
is marked Plaintiff's Exhibit No. 9, and which is as
follows :

Plaintiff's Exhibit No. 9.

" Referring to my letter of the 14th inst., I beg
to state that I have found the following error, in
going through the account fro 'Governor Forbes/
' Voyage 3';

71/2% commission inward freight $38,637.73, which,
of course, is meant to be 5%, and I shall thank you
to pay the difference to my Frisco office, viz, $965.93."

"Kristiania, November 10th, 1917.
"C. Henry Smith, Esq.,
"Dear Sir:

"I duly received your various letters of 8th,
14th, 24th and 28th August, further of 1st and 25th
of September, contents of which do not call for any
comment on my part presently.

"Meanwhile I confirm my letter of 31st ult, in
which I stated that I could not understand that there
should only be a balance of $25,000 in my favor, on
account of final settlement. I now learn by a cable
received from Mr. Lindvig that about $64,000, have
been paid out of 'Kegulus' net earnings, but I have

202 C. Henry Smith

received no advice as to what has been done with
the following balance, according your statements:
$41,523.86, balance from 'Baja 0.,' voyage 11,
$9,957.37, balance from 'Gov. Forbes,' voyage 2.

"Respecting the Nitrate contract, I wrote you on
the 6th inst., and I do not need to add anything now
that I learn from Mr. Lindvig that you intend to re-
tain 5 per cent, on whole nitrate contract, against
which I earnestly protest.

"The position of the Baja C. is not so satisfactory
as it might be expected. This is due to very high
taxes of war, which the Company will have to pay,
and besides, the expenses have been very high.
There will probably be no more dividend for 1917
than 25 per cent, at the close of the year. These
25 per cent, will probably be distributed shortly. In
case you should care to sell your shares, you may
let me know. I mentioned this, as you cabled me
on the 5th October, asking whether I would sell my
interests in the Baja Company.

"Yours very truly,
"A. 0. LINDVIG.''

Exhibit "D."

"January 16, 1915.
"A. O. Lindvig, Esq.,

' i Christiania, Norway.
"Dear Sir:

"We beg to hand you herewith statement of 'Baja
[165 — 142] California' on the outward trip to San
Francisco, and in support of the items given, also
invoices and receipts.

vs. A. 0. Lindvig. 203

"The 'Baja California' cleared from here Christ-
mas Eve, Dec. 24th, for Seattle, loading southbound
as already reported to you by cable. She underwent
the necessary changes with regard to the oil burning
system, and also took on, all told, 1720 barrels oil.
We have made a contract with the Standard Oil Co.,
at a very favorable rate, viz: 65 cents per barrel,
which we have been informed is the lowest price that
has been made in San Francisco for four years.
The steamer will probably burn about 75 barrels per
day, and as the price of coal is $7.25 per ton, you may
figure what saving may be effected by burning oil
figuring that she burns 15 tons of average good coal
per day. The cost of the change in connection with
the oil burning system as we have advised is about
$1269.94, and as soon as we have the specified invoice,
we will advise you further in that connection.

"On the Panama Canal invoice, we have you
credit for telegrams, as these should be paid out of
our allowance per month covering such expenditure.
We hardly believe, however, that $45.00 per month
would cover this cost, as the cost of telegrams for us
run up very high, and some of our agents insist also
on having their telegrams paid, so we are out con-
siderable every month. On certain freight we are
also compelled to pay 2% per cent., and some firms,
both steamship companies and shippers, insist on
5 per cent. In the latter case we wTould of course
be out the entire commission if we accepted such
freight."

1204 ('. Henry Smith

Exhibit "E."
"Kristiania, 8th February, 1915.
uMessi s. I !. Henry Smith, Inc.
•-San Francisco.

"Dear Sirs:

" I duly received your favors of the 15th and 16th,
also telegram of the 5th inst., from which I note that
you can now obtain 6 dollars per ton for the 30000
tons shipment over one year —

"As telegraphed you in reply I consider this quan-
tity too large for such a period as it would of course
be quite impossible to manage it, with only two
steamers. I added in my telegram that the S/S
'Henry Ibsen' is just reported having been closed
with nitrate from Chile to U. S. at 50/-per ton, so
you will observe that the freights are advancing also
in that direction.

,kkI am very glad to note that you have been able
to make a contract with the Standard Oil Co. at 65
cents per barrel, which is very favorable.

"The British Government now insists upon receiv-
ing a bank guarantee for the half of the ships value.
That the ship will not be used in the service of the
enemies of the U. S. or their allies, and that she will
not carry any goods, which may be destined for
or transshipped to the said enemies. I am now try-
ing to induce the British authorities to waive this
demand, but am afraid my application will not be
complied with, and that I shall have to arrange
[166 — 143] for the bank-guarantee required.

"Yours truly,

"A. O. LIXDVIG."

vs. A. 0. Lindvig. 205

Exhibit "F."

" December 28, 1915.
"A. O. Lindvig, Esq.,

' ' Christiania, Norway.
"Bear Sir:

"S/S 'Sinaloa':—
"In connection with the statement rendered by the
Anglo American Steamship Agencies, Inc., for the
' Sinaloa ' loading, we have in the meantime, received
a refund for the wharfage from the Panama Canal
of $66.25, w7hich wTe will include in our next state-
ment to you.

"A further refund due the steamer is as follows:

For Tug Service $3.00

For Pilotage 27.00

For Handling Lines 10.00

For Handling Ashes ISs.50

All told $52.50

"We have written twice to Alaska to the Govern-
ment Commissioner there, for the dead freight due,
but have as yet not heard from him. It would of
course, take a little longer time to get this refund
from the Government as it wrould otherwise, but you
may rest assured that we are doing all we can to get
this money as soon as possible.

"As to commission charged on expenses paid by
the agents, it is in some instances customary to do so ;
to charge $2.50 or even 5 per cent, on such disburse-
ments. For instance, if the agent in South America
would advance money for a steamer, which may not

206 C. Henry Smith

be paid for 30 or more days, he would of course be
entitled to some remuneration for this service. We
are, of course, at all times trying to avoid unneces-
sary expenses, and we shall in the future, as far as
the Northern ports are concerned, have our own men
attend to disbursements there.

" ' Archer'

"The vessel is now out in the stream in San Fran-
cisco Bay and we are at this time drawing up speci-
fications for repairs and for overhauling. We shall
advise you in the next few days as to the whole
arragement.

"The whole quesion is, whether we can obtain
an engine large enough for the vessel. We tele-
graphed you about an engine being on exhibit now
at the Panama Fair. This engine is 200 H. P. and
the manufacturers claim that it can develop even 225
H. P. which would give the vessel a speed of 7 knots
loaded. An accurate estimate in that respect how-
ever, is hard to obtain. It was our intention to
change the vessel into a four-mast Schooner which
[167 — 144] would increase her sailing power and
make a few changes to give her more space for cargo.
As we already have advised, she now has a
Coal-Gas Producing Engine and we are also ascer-
taining whether it may be practicable to overhaul
and repair this engine and operate one or two trips
until we get an oil engine, instead of buying coal
in Mexico, which is at present very high. We have
been informed that it has sold up to $22.00 per ton
and in that case she would not be very economical
down there.

vs. A. O. Lindvig. 207

"We have been offered by several parties, a higher
price than we paid for her, and one man offered
today $27,000.00 for her as she is today. In the
Mexican run she would we believe, be suitable, al-
though the insurance would be considerably higher
than on the steamer. The steam Schooners running
down there at the present time, pay from 5 per cent
to 8 per cent, and the shippers have asked us many
times to obtain a steamer for the trade. We note
that you mention the S. S. 'Progresso,' which would,
of course, be entirely suitable. She is the exact size
for the trade : being also an oil burner she would be
very economical here. As the Panama Canal is now
open for vessels of this size, she could get through
at any time.

"We have been offered freight northbound from
Panama Canal to Alaska, or even touching the Cen-
tral American ports of call northbound, we could fill
her up, or wTe could even get freight southbound
from Panama for Nitrate ports. At all events if
you are still interested in sending her out here, we
would surely make good use of her in the Central
American trade. Kindly send us a cable if you are
disposed to send her out.

"S/S'Rizal.'

"This steamer is now, so far as we understand,
altogether out of the market and wre cannot get the
owners to reply to any proposition.
"S/S 'Mazatlan.'

"She was changed to American Registry and is
now being operated under the name of "Edna."

208 C. Henry Smith

At present she is in Balboa on the way to South
American ports with general cargo.

"S/S 'Sinaloa,' Voy. No. 3.
"She is now fully booked for this trip with lumber
and flour, Callao and Arica. Lumber rates are at
present very good, being up to $22.00 per 1,000 feet.
Her total freight will amount to about $35,000.00.
We are also closing the 'Baja California' for Guay-
quil and Talara Bay, where oil is obtainable and
Callao, as well as Arica — lumber and flour at similar
rates.

' ' Yours very truly."
[168—145]

Exhibit "G."

"Kristiania, May 3d, 1917.
" Messrs. C. Henry Smith, Inc.

"San Francisco,
"Dear Sirs:

"Since writing you on the 21st inst. I have received
your statements dates 22nd March, etc., referring
to the ' Governor Forbes,' 'Baja California/ and
'Regulus.' I shall revert the same, after having
gone through our accounts.

"In the meanwhile I have noticed, at a glance,
that the cost of repairs for the former steamer have
been frightful and very much higher than what you
wrote on the 15th February.

"Nitrate Contract. I received your cable of 30th
ult.

" 'Believe Dupont inclined make new contract
stop Wilmington manager will be here shortly
stop will cable best rate obtainable stop last

vs. A. 0. Lindvig. 209

charters sailing ships twelve dollars stop please
cable if in order negotiating.'
and have replied today as follows :

" i Consider twelve dollars too low if better
not possible suggest fixing contract for Baja
Sinaloa Begulus for one year about 35000 tons
our option up to 50000 tons at fifteen dollars
clean terms. '
As the present rate for sailing ships in $12, I con-
sider that the rate for steamers must be at least $15.
I now awTait to hear what you have been able to do,
on basis hereof.

"S. S. ' Governor Forbes.' You state in your
cable of 30th ult. that she has sailed for San Fran-
cisco. Please note that I cannot find having re-
ceived any advice of this vessel's movements since
she arrived at Guayquil on the 13th April.

Cable to Mr. Lindvig. I note that same has been
delivered.

" Commissions to Duncan Fox &c, Referring
to an account from Duncan Fox, &c, dated Lima,
20th December, referring to S. S. ' Sinaloa. ' I note
that I have been debited with 7^2% commission.
As far as I can judge by your letter of 23rd Decem-
ber last year, the said firm has practically agreed to
charge only 2%% commission for themselves, and
consequently I consider that the total commission
ought not to exceed 5 per cent, in such cases. Please
let me hear howr you look at this.

" Statement dated 22nd March. You have debited
'A. O. Lindvig' for several items, for instance,

210 C. Henry Smith

k( \ uilde Publishing Co.,' &c. I do not know what this
refers to.

" Yours faithfully,

"A. O. LINDVIG.
"P. S. — Nitrate Contract. War Insurance. As
the war insurance premiums have lately been in-
creased heavily — for instance 100 per cent, as far as
the W. C. of America is concerned — I am obliged to
stipulate that any further advance ' decided by the
Norwegian War Insurance will have to be paid by
charterers. The present rate is 4 per cent, per
annum. I shall be cabling you re this. ' ' [169 — 146}

Exhibit "H."

"June 28th, 1917.
"A. O. Lindvig, Esq.,

"Kristiania, N.
"Dear Sir:

"We are in receipt of your letters of May 1st, 3rd,
and 10th, together with duplicates, and contents
noted.

"Sinaloa Claim — Treasury Dept.
"We have a statement of the decision of this case,
but we have filed our petition for a rehearing in the
matter, and expect to have a settlement as to how
the case stands in the near future.

"Sinaloa Aground at Cape Blanco.
"We beg to refer you to our cables exchanged in
this connection, and may say that we have had quite
some difficulty in assembling salvage equipment.
There is no salvage company on this coast excepting
the British Columbia Salvage Co. at Victoria, owners

vs. A. 0. Lin dvig. 211

of the steamer ' Salvor. ' This company has only the
one boat, which happened to be engaged in connection
with another wreck of the C. P. R. SS. Co. in the
North.

"We tried very hard to get a suitable boat for the
salvage operation, both in Seattle and Portland as
well as in San Francisco, but unfortunately at this
time of course, every vessel is engaged some way or
other owing to the position of the freight market,
and no one seems to be inclined to lend any of their
boats for the purpose of salving the 'Sinaloa,' fear-
ing they may loose their vessel in doing so.

"We chartered the SS. Green wTood at the sugges-
tion of Capt. Curtis, who is at the wreck represent-
ing the Underwriters here, but engaged by us solely
for this purpose. The Greenwrood, however, after
having loaded all the gear and equipment nec-
essary, broke down outside the Golden Gate and had
to return to port. In the meantime w7e engaged the
Phoenix for the same purpose, and also a barge to
tow the equipment up to Cape Blanco, and wTe are
now ready for sea with the second expedition.

"We have not been able to fix the insurance and we
therefore cabled you to place same at the best possible
figure. We have also cabled London to place the
insurance there if possible.

"The situation so far as the 'Sinaloa' is con-
cerned, is practically the same. However, last Sun-
day a rough gale moved the ship sixty yards nearer
shore. Capt. Curtis, however, telegraphed us that
there is a very good prospect to save the vessel, and
the nitrate in the forward holds has not been dis-

212 C. Henry Smith

charged yet, as it was not deemed advisable to do so
before pumping out the water in the after holds and
until the moorings are laid.

"We appointed Johnson & Higgins average ad-
justers on the Hull as they presented evidence to me
that they represented the Skuld Association of Un-
lerwriters, and they assisted in every way possible.
In the meantime, however, we received your cable
stating that Wilcox, Peck & Hughes should attend
to the adjustments for the Hull Underwriters, and
we so advised Johnson & Higgins, who have entirely
withdrawn. We shall now keep you advised by cable
as to our further movements in the salvage work.
"Transfer Money.

"Regarding the money that we have deposited in
the First National Bank to your credit, we have
cabled you that about $45,000 belongs to the Baja
California Co., as shown on the [170 — 147] state-
ments which no doubt are in your possession now.

"NITRATE CONTRACT.

"We cabled you a few days ago that Mr. Simonton
of the Dupont Co. is now in the City, and prepared
to make a new contract with us for next year's re-
quirements in the amount of 40,000 tons, 10 per cent,
more or less. The rate he intimated was $12.50 pr
ton, which is a little better than we indicated in our
cable of April 30th. At the time we were cabling
on this matter in April, I see that we did not receive
your cable suggesting 35,000 tons or our option 50,000
tons at $15.00.

i ' Of course, there are certain advantages for carry-
ing nitrate for the Dupont people, as we can always

vs. A. (). Lmdvig. 213

make arrangements about discharging cargo at this

port or up north as the situation would require, in
case of labor troubles or otherwise ; and also, as the
new steamer is going, as we understand, into this
nitrate business, the Dupont people may give us cer-
tain assistance in getting the steamer earlier than
we had at first anticipated.

" Commissions to Duncan Fox & Co.

"We wrote you some time ago in connection with
the commission that we had allowed sub-agents in
South America. We find that under certain circum-
stances we cannot obtain any cargo from certain firms
unless we allow 5 per cent. We have, so far as Dun-
can Fox & Co. are concerned, arranged with them for
a commission of 4 per cent., which leaves us 3% per
cent, to cover our own expenses, etc., and we do not
believe this is exorbitant in any way.
New 6000 Tonner.

"We are, of course, keeping in touch with the situ-
ation, and may inform you at this time that so far
as we understand the Government will take over all
contracts, and we do not believe any transfer of this
vessel can be effected in the way that you suggest.
We may, however, be able to arrange with the United
States Shipping Board, that the vessel be operated
under the American Flag for the present owners,
in the nitrate trade. I would like to hear from you
eventually by cable, your attitude in this connection. ' '
[171—148]

The Court erred in giving the following instruction
to the jury:

"This cause has taken a course which calls upon

214 C. Henry Smith

me al this time to direct you to find a verdict in favor
of the plaintiff. It is not essential that you leave
your seats; you may select one of your number as
foreman and have him sign the verdict."

To the giving of said instruction defendant duly
excepted and said exception is here designated as
EXCEPTION No. TWENTY-ONE.

The Court erred in refusing to give the defend-
ant's instruction number one, requested by defend-
ant, and reading :

"If you find that defendant acted as agent for
plaintiff in the transactions involved in this case,
defendant has a right to deduct from the claim of
the plaintiff any lawful claims arising out of his
agency, by way of compensation, advances or reim-
bursements, and interest on such advances."

To the refusal of the Court to give said instruc-
tion defendant duly excepted and said exception is
here designated as

EXCEPTION No. TWENTY-TWO.

The Court erred in refusing to give instruc-
tion No. 2, requested by defendant, and reading:

"In order to entitle defendant to remuneration
for services rendered as agent, by way of commis-
sions or otherwise, it is not necessary to show an ex-
press request for the services by plaintiff as defend-
ant's principal, but such a request may be implied
from the circumstances disclosed by the evidence."

To the refusal of the Court to give said instruc-
tion defendant duly excepted and said exception is
here designated as

EXCEPTION No. TWENTY-THREE.

rs. A. (). Lindvig. 215

The Court erred in refusing to give instruction
No. 8, requested by the defendant, and reading:

[172—149]
"In case you shall find that the defendant in any

particular instance, acted as plaintiff's agenl with-
out any authority to so act, or in excess <>f the
authority given by plaintiff, but that defendant 's acts
were thereafter ratified by plaintiff, or that the plain-
tiff accepted the benefit of defendant's services, I
instruct you that defendant is entitled to the same
compensation and remedy for performing said acts
as if he had been duly authorized to perform the

same."

To the refusal of the Court to give said instruc-
tion requested by the defendant, defendant duly ex-
cepted and said exception is here designated as
EXCEPTION No. TWENTY-FOUR,

The Court erred in refusing to give instruction
No. 9, requested by the defendant, and reading :

"If you find that defendant has performed on his
part all the acts necessary to the accomplishment of
a particular result, such as the freighting of 40,000
tons 10% more or less, of cargo in plaintiff's ves-
sels, for and on behalf of the DuPont de Nemours
Powder Company, defendant cannot be deprived of
his right to the entire compensation by the refusal
or neglect of the plaintiff to thereafter perform the
necessary acts on his part, whereby the contemplated
result is defeated or only partly executed."

To the refusal of the Court to give said instruc-

216 C. Henry Smith

tion defendant duly excepted and said exception is
here designated as

EXCEPTION No. TWENTY-FIVE.

The Court erred in refusing to give instruction
No. 10, requested by the defendant, and reading:

"The failure, refusal or inability of plaintiff to
carry out the complete contract for the transporta-
tion of $40,000 tons, 10% more or less, of cargo for
the DuPont de Nemours Powder Company does not
defeat defendant's right to full compensation for
negotiating this contract, nor is this right defeated
by the fact, if it be a fact, that plaintiff and the Du
Pont de Nemours Powder Company subsequently
modified, rescinded or cancelled the contract or a part

thereof bv mutual consent. ' '

To the refusal of the Court to give said instruction
defendant duly excepted and said exception is here
designated as

EXCEPTION No. TWENTY-SIX.

The Court erred in refusing to give instruction No.
11, requested by the defendant, and reading:
[173—150]

"If you find that plaintiff carried out or offered to
perform the agreement with DuPont de Nemours
Powder Company, or a part of said agreement, with
knowledge of the whole agreement, I instruct you
that such conduct on the part of plaintiff constitutes
a ratification of the whole agreement, and that de-
fendant is entitled to compensation for procuring the
said agreement."

To the refusal of the Court to give said instruction

vs. A. 0. Lindvig. 217

defendant duly excepted and said exception is licit-
designated as

EXCEPTION No. TWENTY-SEVEN.

The Court erred in refusing to give instruction No.
12, requested by the defendant, and reading:

"If you are satisfied that defendant was originally
appointed to act as general agent for plaintiff on the
Pacific Coast, the facts shown by the evidence must
be liberally construed in favor of a ratification by
plaintiff of defendant's acts, and you may consider
very slight circumstances and small matters as suffi-
cient to raise a presumption of ratification, especially
if you should also find that the defendant's acts were
for the benefit of the plaintiff."

To the refusal of the Court to give said instruction
defendant duly excepted and said exception is here
designated as

EXCEPTION No. TWENTY-EIGHT.

The Court erred in refusing to give instruction
No. 13, requested by the defendant and reading :

"If you find that defendant was to receive commis-
sions for contracts made for the benefit of plaintiff
and that during the term of his agency, he procured
contracts for the benefit of plaintiff, I instruct you
that defendant is entitled to commissions not merely
on the contracts which were performed before the
termination of defendant's agency, but that defend-
ant is also entitled to commissions on all contracts se-
cured by him and performed, or to be performed, by
plaintiff subsequent to the termination of defend-
ant's agency."

218 C. Henry Smith

To the refusal of the Court to give said instruction
defendant duly excepted and said exception is here
designated as

EXCEPTION No. TWENTY-NINE.

The Court erred in refusing to give instruction
No. 14, requested by the defendant, and reading :

"The bill of particulars filed by the plaintiff herein
is to be considered as an amplification of his com-
plaint and said bill of particulars specifically dis-
putes the following items in the defendant's ac-
counts; [174—151]

1. Remuneration re contract of 'Reg-

ulus' $ 6,000.00

2. Remuneration re contract ' Romulus'. 10,000.00

3. Commission on purchase of ' Gov-

ernor Forbes' 6,800.00

4. Commission on 'Sinaloa' salvage. . . . 3,165.27

5. Commission Dupont Powder Co 25,517 . 80

6. Commission in inward freight of

'Governor Forbes' 2,049.65

7. Retention of balance stated by Mr.

Smith as an estimated amount for
procuring bookings of freight

prior to October 1, 1917 5,000.00

"The above-mentioned disputed items total the
sum of $58,532.75, and these are the items which
are to be considered and passed upon by you; all
other items in the defendant's accounts are assumed
to be correct."

To the refusal of the Court to give said instruc-
tion defendant duly excepted and said exception
is here designated

EXCEPTION No. THIRTY.

vs. A. O. Lindvig. 219

The Court erred in refusing to give instruction

No. 15, requested by the defendant, and reading:

"The defendant is entitled to recover a commis-
sion on the purchase of the ' Governor Forbes,' not-
withstanding he may have entered into an agree-
ment for the purchase of said vessel in November,
1916, and notwithstanding the payment of her pur-
chase price may have been completed in the spring
of 1917, provided you believe from the evidence that
the services rendered by the defendant in connec-
tion with the cablegrams exchanged between him
and the plaintiff entitled him to such a commission
and provided you believe that the omission to enter
said commission upon any of the accounts presented
to the plaintiff prior to October 1, 1917, was due to
inadvertence and mistake."

To the refusal of the Court to give said instruc-
tion defendant duly excepted and said exception is
here designated

EXCEPTION No. THIRTY-ONE.

The Court erred in refusing to give instruction
No. 16, requested by the defendant, and reading :

"The Court instructs the jury to find in favor of
the defendant as to the item of $12,050 referred
to in plaintiff's bill of particulars, for the details of
which it is therein stated that the plaintiff has sent
to Christiania. "

To the refusal of the Court to give said instruction
defendant duly excepted and said exception is here
designated [175—152]

EXCEPTION No. THIRTY-TWO.

220 C. Henry Smith

The Court erred in refusing to give instruction
No. 17, requested by the defendant and reading:

"I charge you that the agency contract entered
into by and between A. O. Lindvig and C. Henry
Smith on June 29, 1914, had sole reference to C.
Henry Smith acting as the agent for the 'A/S/Baja
California' in the operation of steamers between
Mexican, Central American, West Coast of United
States and British Columbia ports; and I instruct
you that the services rendered by C. Henry Smith
in contracting for, and supervising the construction
of the ' Romulus' and 'Regulus' and in purchasing
the ' Governor Forbes,' were not included within his
duties as agent under said contract of June 29,
1914."

To the refusal of the Court to give said instruction
defendant duly excepted, and said exception is here
designated

EXCEPTION No. THIRTY-THREE.

The Court erred in refusing to give instruction
No. 18, requested by the defendant, and reading:

" Where there is a written contract between a
principal and an agent providing for a certain com-
pensation to the agent for the performance by him
of the services required or contemplated by the con-
tract, and services are rendered by the agent in ad-
dition to those required or contemplated by the
written contract and in connection with transactions
not included in the matters to be attended to by the
agent under the written contract, and such extra

vs. A. 0. Lindvig. 22]

services are of such a nature and were rendered
under such circumstances as to imply a promise on
the part of the principal to pay for the same, then
and under such circumstances, I charge you that
the agent is entitled to recover the reasonable value
of such extra services."

To the refusal of the Court to give said instruction
defendant duly excepted, and said exception is here
designated

EXCEPTION No. THIRTY-FOUR.

The Court erred in refusing to give instruction
No. 19, r quested by the defendant, and reading:

"Whenever the circumstances under which ser-
vices were rendered and the character of the ser-
vices performed, create a legal liability to pay on
the part of the person for whose benefit the services
were performed, the law implies a promise to pay
for such services; and the request necessary to sup-
port such promise may be inferred from the bene-
ficial nature of the services and the circumstances
of he transaction. ' ' [176—153]

To the refusal of the Court to give said instruction
defendant duly excepted, and said exception is here
designated

EXCEPTION No. THIRTY-FIVE.

The Court erred in refusing to give instruction
No. 20, requested by the defendant, and reading :

"As to the item of $2,049.65 as defendant's com-
mission on the inward freight of the 'Governor
Forbes/ I charge you as a matter of law that your
verdict should be in favor of the defendant, "

222 C. Henry Smith

To the refusal of the Court to give said instruction
defendant duly excepted, and said exception is here
designated

EXCEPTION No. THIRTY-SIX.

The Court erred in refusing to give instruction
No. 23, requested by the defendant, and reading :

"I instruct you that it is not necessary for the
defendant to prove an express promise by the plain-
tiff to compensate the defendant for his services
in connection with the contracting and building of
the 'Regulus' and i Romulus.' It is sufficient for
the defendant if he proves in this behalf that the
services rendered by him in connection with the
contracting and building of said vessels were out-
side of the scope of his duties under the agency
contract of June 29, 1914, and that his services in
connection with the contracting and building of said
vessels were beneficial to the plaintiff and were of
such a nature and rendered under such circum-
stances as to imply a promise upon the part of the
plaintiff to pay for said services."

To the refusal of the Court to give said instruction
defendant duly excepted, and said exception is here
designated

EXCEPTION No. THIRTY-SEVEN.

The Court erred in refusing to give instruction
No. 24, requested by the defendant, and reading:

"If you believe from the evidence in this case that
prior to the termination of the defendant's agency
the employees of the defendant engaged cargo for
sailings scheduled to occur within a few days sub-

vs. A. O. Lindvig. 223

sequent to the termination of the defendant's
agency, and that upon the termination of the de-
fendant's agency his former employees removed to
the newly established office of the plaintiff all rec-
ords of such cargo engagements, and that thereafter,
when demand was made by defendant upon the
plaintiff for a statement of the cargo booked prior
to [177 — 154] the teiqirination of the defendant's
agency, the defendant at first denied that any cargo
excepting a shipment of lumber by the defendant
had been booked prior to the termination of the
defendant's agency, and that thereafter and as a
result of the defendant's demands the plaintiff ad-
mitted that some cargo had been booked prior to the
termination of the defendant's agency, then, and
under such circumstances, I charge you that the
burden of proof is upon the plaintiff to show that
the defendant has retained as payment of his com-
mission on freight booked prior to the termination
of his agency, an amount greater than the defendant
is entitled to as his commissions upon the freight
engaged prior to the termination of the defendant's
agency."

To the refusal of the Court to give said instruction
defendant duly excepted, and said exception is here
designated

EXCEPTION No. THIRTY-EKJHT.

The Court erred in refusing to give instruction
No. 25, requested by the defendant, and reading :

" Although defendant's compensation as agent for
plaintiff is specified in the contract of employment,
you may nevertheless find, if you believe it to be the

22 1 <7. Henry Smith

fact, thai defendant rendered services to the plaintiff
or a character different from that provided for in
said contract of employment; and if you so find,
then I instruct you that defendant is entitled to a
reasonable competition for such services.' '

To the refusal of the Court to give said instruction
defendant duly excepted, and said exception is here
designated as

EXCEPTION No. THIRTY-NINE.

The Court erred in refusing to give instruction
No. 26, requested by the defendant and reading :

"I instruct you that the defendant is entitled to a
reasonable compensation for all services not covered
by the contract of June 29, 1914. In determining
the value of such services you are not confined to
the amounts retained by the defendant in the re-
spective instances, but may consider the value
placed by defendant upon such services as one of
the circumstances determining, with all the other
circumstances surrounding such services, what
would be a reasonable compensation, which may be
less or greater than the same retained by defendant.
In case the sum total of the amounts determined
by you to be reasonable in each instance aggregates
a sum equal to or greater than the sum of $70,582.72,
your verdict must be for the defendant. ' ' [ 178 — 155]

To the refusal of the Court to give said instruction
defendant duly excepted, and said exception is here
designated as

EXCEPTION No. FORTY.

To the refusal of the Court to give said instruction
No. 27, requested by the defendant, and reading :

vs. A. 0. Lindvig. 225

"I instruct you that, under the contract of June
29th, 1914, the defendant is entitled to a reasonable
commission on the freight earned by the steamers
of the Baja California Company in performing the
contract with the Du Pont de Nemours Company
for the transportation from the Republic of Chile
to San Francisco, California, and elsewhere of 40,-
000 tons, 10% more or less, of nitrate."

To the refusal of the Court to give said instruction
defendant duly excepted, and said exception is here
designated as

EXCEPTION No. FORTY-ONE.

The Court erred in refusing to give instruction
No. 28, requested by the defendant, and reading:

"I instruct you that the contract of June 29th,
1914, between plaintiff and defendant was an agree-
ment with regard to a proposed steamship line to
operate steamers between Mexican and Central
American ports, and West Coast of United States
as well as British Columbia, and that such agree-
ment does not govern the value of services con-
nected with a steamship line operating steamers
between South American ports and the West Coast
of the United States or British Columbia. That
defendant is entitled to a reasonable compensation
for any services performed by him for plaintiff in
connection with steamers plying between ports of
the United States or British Columbia and South
American ports. "

To the refusal of the Court to give said instruction
defendant duly excepted, and said exception is here
designated as

EXCEPTION No. FORTY-TWO. [179—156]

226 C. Henry Smith

In the District Court of the United States, in and
for the Northern District of California, Second
Division.

No. 16,124.

A. 0. LINDVIG,

Plaintiff,
vs.
C. HENRY SMITH,

Defendant.

Certificate of Judge to Bill of Exceptions.

The foregoing bill of exceptions is a true bill of
exceptions, correct in all respects, and is hereby ap-
proved, allowed, settled, certified and may be filed
with the clerk of this court and make a part of the
record herein, subject to the objection and exception
at this time by plaintiff to the action of the Court
in certifying the same.

Dated this 9th day of May, A. D. 1921.

(Sgd.) WM. C. VAN FLEET,

Judge.

[Endorsed] : Filed May 9, 1921. W. B. Maling,
Clerk. By J. A. Schaertzer, Deputy Clerk. [180]

vs. A. O. Lindvig. 227

In the District Court of the United States, in and for
the Southern Division of the Northern District
of California, Division Two.

No. 16,124.

A. O. LINDVIG,

vs.
C. HENRY SMITH,

Plaintiff,

Defendant.

Petition for Writ of Error.

To the Honorable, The United States District Court
Aboved Named, and to Honorable WILLIAM
C. VAN FLEET, Judge Thereof:
C. Henry Smith, the defendant in the above-en-
titled action, feeling himself aggrieved by the ver-
dict of the jury and the judgment entered against
him in the above-entitled cause on the 13th day of
June, 1919, and claiming that in the trial of said
cause certain errors were committed to his preju-
dice, all of which appear in detail in the assignment
of errors filed herewith, comes now by Andros &
Hengstler, and Goodfellow, Eells, Moore & Orrick,
his attorneys, and petitions said Court for an order
allowing him, said defendant, to prosecute a writ of
error to the United States Circuit Court of Appeals
for the Ninth Circuit under and according to the
laws of the United States in that behalf made and
provided; and that an order be made fixing the
amount of security which the said defendant shall
give and furnish upon said writ of error; and that

228 C. Henry Smith

upon the giving of such security all further proceed-
ings in this Court be suspended [181] and stayed
until the determination of said writ of error by
the United States Circuit Court of Appeals for the
Ninth Circuit. And your petitioner will ever pray.
Dated San Francisco, California, December 11,
1919.

ANDROS & HENGSTLER,
GOODFELLOW, EELLS, MOORE &
ORRICK,

Attorneys for Defendant.

[Endorsed] : Filed Dec. 12, 1919. W. B. Maling,
Clerk. By J. A. Schaertzer, Deputy Clerk. [182]

In the District Court of the United States, in and for
the Southern Division of the Northern District
of California, Division Two.

No. 16,124.
A. 0. LINDVIG,

Plaintiff,
vs.
C. HENRY SMITH,

Defendant.

Assignment of Errors and Prayer for Reversal.

C. Henry Smith, the defendant in the above-entitled
action, makes and files the following assignment of
errors herein to the United States Circuit Court of
Appeals for the Ninth Circuit.

The District Court erred in each of the following
rulings made by it on the trial of said action:

vs. A. 0. Lindvig. 229

1. In sustaining plaintiff's objection to the Fol-
lowing question propounded by defendanl to the
witness C. Henry Smith:

"Q. What was the market value of the 'Reg-
ulus' at the time she was completed, on the firsl
day of April, 1917?"

2. In sustaining plaintiff's objection to the fol-
lowing question propounded by defendant to C.
Henry Smith :

"Q. What was the market value of the Romu-
lus' at the time of her completion?"

3. In sustaining plaintiff's objection to the follow-
ing [183] question propounded by defendant to
the witness C. Henry Smith:

"Q. I will ask you to state whether or not
Mr. Lindvig at any time claimed that you were
not entitled to your commission on the 'Regu-
lus' until the time that he filed this suit?"

4. In sustaining plaintiff's objection to the fol-
lowing question propounded by defendant to the
witness C. Henry Smith:

"Q. I will ask you to state whether or not
Mr. Lindvig at any time either said to you
verbally or in writing that you were not en-
titled to your commission on the 'Regulus' prior
to the first day of December, when a question
was raised in regard to that matter in a letter
written by Mr. Prank, which is carried into
the bill of particulars?"

5. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness C. Henry Smith:

230 C. Henry Smith

"Q. What was the value of the 'Governor
Forbes,' the market value here in San Fran-
cisco, at the time of her delivery in 1917?"

6. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness John A. Bishop :

"Q. I will ask you to state whether or not
you know what the custom is without referring
nowT to any particular contract, what the cus-
tom is, if you know, in regard to allowing re-
imbursement for services by the agent in con-
nection with the salvaging of vessels, where he
has a general contract wherein the compensa-
tion specified is a percentage of the freight
earned?"

7. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness John A. Bishop :

"I will ask you to state whether or not, in
all the cases mentioned by you occurring with
respect to the vessels named, of which Williams,
Dimond & Co. were the agents, and Mr. Gray
wTas the agent, and Evans was the agent, whether
or not in each and every of those cases the gen-
eral agent wTas allowed compensation for the
services rendered by him in connection with
those vessels?"

8. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness John A. Bishop :

"Q. I will ask you whether or not it is the
custom in all cases where the general agents

vs. A. 0. Lindvig. 2?A

render services in connection with the calvage

of the vessel, to not only [184] allow him
from his principal a compensation for the gen-
eral services in connection therewith, but an
allowance of 21/1> per cent on the total amount
of disbursements in connection therewith, if the
money be that of his principal, and 5 per cent
if the money be that of himself?"

9. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to
the witness John A. Bishop:

"Q. I will ask you to state whether or not
the custom, if any, is uniform, and has been for
the last twenty years in this port, whereby gen-
eral agents are allowed reimbursement for the
services rendered by them in connection with
the salvage of vessels, where their agency con-
tract merely specified as their remuneration a
certain percentage upon the freight earned?"

10. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness John A. Bishop :

"Q. I will ask you to state whether there is
now, and has been for 20 years last past a cus-
tom in this port, and a uniform custom, whereby
the general agent is reimbursed for services
rendered by him in connection with the salvage
of vessels by the owner, so far as his time and
the value of his services rendered in connection
therewith are concerned, where he has an agency
contract, in which the only compensation speci-

232 C. Henry Smith

tied is in respect to a percentage upon freight
earned?"

11. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness John A. Bishop:

"Q. I will ask you to state whether there is
now and has been for 20 years last past a gen-
eral custom of allowing to the agent, the gen-
eral agent of a steamship line of steamers, a
percentage amounting to 5 per cent on the
amount disbursed by him of his own money,
is his own money, where he has a general
agency contract, in which the only remunera-
tion specified therein is in respect to a percent-
age of freight earned?"

12. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness John A. Bishop :

UQ. I will ask you if the moneys advanced by
the agent are those of the owner, if then he is
entitled to the commission of 2% per cent under
the same circumstances, that is, where his gen-
eral agency contract is one wherein the only
compensation justified is a percentage in re-
spect to freight earned?"

13. In sustaining plaintiff's objection to the offer
by defendant [185] in evidence of the following
items from the "Statement of General Average,
Case of the 'Sinaloa,' June 15, 1917":

" $3,165.27, C. Henry Smith— Re-
muneration for handling a/c
5% Com. on $63,305.54 $3,165.27.

vs. A. 0. Lindvig.

"Provisions $38.07, Genera] Aver-
age, 2826.95. Advances $27 1.90

"Vessel & Owners, $35.35."
" $4,290.82'. Disbursing the Gen-
eral Average :
With funds in hand 2%% on

$8,552.19 $213.80

Without funds in hand 5%

$81,540.32 4,077.02

As customary $4,290.82"

" $11,380. 74 Interest on General
Average Disbursements and al-
lowances from date of outlay
until probable date of settle-
ment, $108,388.77 at 7% per an-
num $11,380.74."

14. In sustaining plaintiff's objection to the offer
in evidence by the defendant of the following cable-
grams exchanged between the plaintiff and the de-
fendant.

"June 16, 1916.
"Sinaloa aground near Cape Blanco in fog
this morning have sent tug for assistance.

"SMITH."
"June 17, 1916.
"Alta sailed for Melbourne stop Sinaloa posi-
tion very difficult stop broadwide to the beach
stop leaking stop ten feet wrater aft hold.

"SMITH."

234 C. Henry Smith

"June 19, 1916.
" Wilcox Peck Hughes attending average Sin-
aloa.

"LINDVIG."

" June 20, 1916.
"Urgent Wilcox cable chance floating Sinaloa
slight stop everything possible must be clone to
save her.

"LINDVIG."
"June 20, 1916.
" Kindly cable amount Sinaloa insured stop
Smith now at ship stop after hold flooded no
water forward stop discharging cargo onto
barges.

"SMITH."
"June 22, 1916.
"Steamer Sinaloa insured as follows Seven
hundred [186] thousand kroners full three
hundred thousand hull interest hundred thou-
sand freight interest stop understand now pros-
pects save ship stop condemnation must be
avoided if by any means possible.

"LINDVIG."

"June 21, 1916.
"Sinaloa appointed Johnson and Higgins ad-
justers stop they are agents for Skuld.

"SMITH."
"June 23rd, 1916.
"Steamer Sinaloa you must adhere to my in-
structions appoint Wilcox Peck & Hughes who
are agents main hull underwriters stop should

vs. A. 0. Lindvig. 235

otherwise have no objection employ Johnson
Higgins.

"LINDVIG."

"June 23, 1916.
"Believe Sinaloa may be floated according to
experts stop assembling fuel equipment to go
north stop vessel in a rather protected position
during summer.

"SMITH."
"June 29, 1916.
"Please insure ocean going barge sent to Sin-
aloa value fifteen thousand dollars.

"SMITH."
"July 2, 1916.
"Covered hull insurance barge fifteen thou-
sand dollars two per cent voyage Frisco to,
steamer Sinaloa therefrom to Puget Sound or
Frisco.

"LINDVIG."
"June 30, 1916.
"Please place insurance salvage equipment
sent aboard Phoenix and ocean going barge to
Sinaloa valued at twenty-five thousand dollars.

"SMITH."
"July 3, 1916.
"Steamer Sinaloa referring your cables 29/6
and 30/6 we have insured two barges and equip-
ment in all 40,000 dollars value is this correct.

"LINDVIG."
15. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness C. Henry Smith:

236 C. Henry Smith

UQ. I will ask you to state whether you ar-
ranged where the vessel should be brought to
when she was taken away or when she was
floated."

16. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness C. Henry Smith:

UQ. I will ask you to state whether or not
you submitted the repairs of the vessel to differ-
ent shipbuilding [187] yards here in San
Francisco on the lowest bid'?"

17. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness Wilfred Page :

"Q. What became of the different copies of
bound volume entitled 'Statement of the Gen-
eral Average Case of the "Sinaloa," June 15,
1917,' as they were made up, what disposition
was made of them?"

18. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness Wilfred Page :

"Q. I will ask you to state whether Mr.
Lindvig ever thereafter or any member of his
office, dissented from the item therein con-
tained, the $3,165 allowed to Mr. Smith in con-
nection with his services with respect to the sal-
vaging of this vessel?"

19. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness Wilfred Page:

vs. A. 0. Lindvig. 237

UQ. Was there any contribution to be made
by them (Dupont Company) to the general
average ? ' '

20. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness Wilfred Page :

"Q. So far as the cargo was concerned, do
you know whether or not Mr. Lindvig has, in
fact, collected from the cargo upon the basis of
including in the general average this item of
$3,165, allowed to Mr. Smith ?"

21. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness C. Henry Smith:

"Q. As a matter of fact, at the time that bill
of particulars was filed, was it true that Mr.
A. O. Lindvig did not have the vouchers that
supported your different accounts?"

22. In granting plaintiff's motion to strike out
plaintiff's bill of particulars.

23. In sustaining plaintiff's objection to the fol-
lowing question propounded by defendant to the
witness C. Henry Smith:

"Q. Now, as a matter of fact, Mr. Smith, so
far as you can tell at the present time wThat are
the disputed items, or the amount of them*?"
[188]

24. In sustaining plaintiff's objection to the fol-
lowing question propounded by the defendant to the
witness C. Henry Smith :

"Q. I will ask you to state whether Mr. Lind-
vig, or anyone else connected with the plaintiff

238 C. Henry Smith

in this case, or anybody else, has ever stated to
you what the item of $12,050 has reference to
which is mentioned in the bill of particulars
filed by the plaintiff in this case, and as to
which it is therein stated that they are sending
to Christiania for details ?"

25. In sustaining plaintiff's objection to the offer
in evidence of the following cablegram relating to
stock in the corporation owning the "Regulus"
from the defendant to the plaintiff, dated January
11, 1916:

" Stock accepted letter twenty-first Decem-
ber."

26. In sustaining plaintiff's objection to defend-
ant's offer in evidence of the following cablegram
from the plaintiff to the defendnat, dated January
19, 1916, and relating to stock in the corporation
owning the "Regulus."

"If you don't wish to overtake full amount
two hundred thousand Kroner Pacific I can dis-
pose of about one hundred thousand Kroner
here please telegraph."

27. In sustaining plaintiff's objection to the
offer in evidence by defendant of the following
cablegram from the defendant to the plaintiff, dated
January 19, 1916:

"Cannot give up any of two hundred thou-
sand kroner stock writing."

28. In sustaining plaintiff's objection to the
offer in evidence by defendant of the following let-
ter from the defendant to the plaintiff, dated Janu-
ary 19, 1916 :

vs. A. O. Lindvig. 239

"Referring to your cal)le which we re-
ceived today, regarding stock in the new steamer
now building at the United Engineering Works,
we regret that owing to some arrangements with
our friends here we cannot give up any of this
stock.

"As we originally asked for not less than
$100,000.00 in this steamer, we have been
obliged to take very much less than wTe in-
tended at the outset." [189]
?9. In giving the follow7ing instruction to the

"This cause has taken a course which calls
upon me at this time to direct you to find a ver-
dict in favor of the plaintiff. It is not essen-
tial that you leave your seats; you may select
one of your number as foreman and have him
sign the verdict."

30. In refusing to give the defendant's instruc-
tion number I, requested by defendant, and reading:

"If you find that defendant acted as agent
for plaintiff in the transactions involved in this
case, defendant has a right to deduct from the
claim of the plaintiff any lawTful claims arising
out of his agency, by way of compensation, ad-
vances or reimbursements, and interest on such
advances."

31. In refusing to give instruction No. 2, re-
quested by defendant, and reading :

"In order to entitle defendant to remunera-
tion for services rendered as agent, by way of
commissions or otherwise, it is not necessary to

240 C. Henry Smith

show an express request for the services by
plaintiff as defendant's principal, but such a re-
quest may be implied from the circumstances
disclosed by the evidence."

32. In refusing to give instruction No. 8, re-
quested by the defendant, and reading:

"In case you shall find that the defendant in
any particular instance, acted as plaintiff's
agent without any authority to so act, or in ex-
cess of the authority given by plaintiff, but that
defendant's acts were thereafter ratified by
plaintiff, or that the plaintiff accepted the ben-
efit of defendant's services, I instruct you that
defendant is entitled to the same compensation
and remedy for performing said acts as if he
had been duly authorized to perform the same."

33. In refusing to give instruction No. 9, re-
quested by the defendant, and reading:

' ' If you find that defendant has performed on
his parts all the acts necessary to the accom-
plishment of a particular result, such as the
freighting of 40,000 tons, 10% more or less, of
cargo in plaintiff's vessels, for and on behalf of
the du Pont de Nemours Powder Company, de-
fendant cannot be deprived of his right to the
entire compensation by the refusal or neglect of
the plaintiff to thereafter perform the necessary
acts on his part, whereby the contemplated re-
sult is defeated or only partly executed."
[190]

34. In refusing to give instruction No. 10, re-
quested by the defendant, and reading:

vs. A. O. Lindvig. 24 1

"The failure, refusal or inability of plaintiff
to carry out the complete contract for the trans-
portation of 40,000 tons, 1095 more or less, of
cargo for the du Pont de Nemours Powder
Company does not defeat defendant's right to
full compensation for negotiating this contract,
nor is this right defeated by the fact, if it be a
fact, that plaintiff and the du Pont de Nemours
Powder Company subsequently modified, re-
scinded or cancelled the contract or a part
thereof by mutual consent."

35. In refusing to give instruction No. 11, re-
quested by the defendant, and reading:

"If you find that plaintiff carried out or
offered to perform the agreement with du Pont
de Nemours Powder Company, or a part of said
agreement, with knowledge of the whole agree-
ment, I instruct you that such conduct on the
part of plaintiff constitutes a ratification of the
whole agreement, and that defendant is entitled
to compensation for procuring the said agree-
ment. ' '

36. In refusing to give instruction No. 27, re-
quested by the defendant, and reading :

"I instruct you that, under the contract of
June 29, 1914, the defendant is entitled to a rea-
sonable commission on the freight earned by the
steamers of the Baja California Company in
performing the contract with the du Pont de
Nemours Powder Company for the transporta-
tion from the Republic of Chile, to San Fran-
cisco, California, and elsewhere, of 40,000 tons,
.10% more or less, of nitrate."

242 C. Henry Smith

37. In refusing to give instruction No. 12, re-
quested by the defendant, and reading:

"If you are satisfied that defendant was
originally appointed to act as general agent for
plaintiff on the Pacific Coast, the facts shown
by the evidence must be liberally construed in
favor of a ratification by plaintiff of defend-
ant's acts, and you may consider very slight
circumstances and small matters as sufficient to
raise a presumption of ratification, especially if
you should also find that the defendant's acts
were for the benefit of the plaintiff."

38. In refusing to give instruction No. 18, re-
quested by the defendant, and reading:

"Where there is a written contract between a
principal [191] and an agent providing for a
certain compensation to the agent for the per-
formance by him of the services required or
contemplated by the contract, and services are
rendered by the agent in addition to those re-
quired or contemplated by the written contract,
and in connection with transactions not in-
cluded in the matters to be attended to by the
agent under the written contract, and such extra
services are of such a nature and were rendered
under such circumstances as to imply a promise
on the part of the principal to pay for the
same, then and under such circumstances I
charge you that the agent is entitled to recover
the reasonable value of such extra services."

39. In refusing to give instruction No. 25, re-
quested by the defendant, and reading :

vs. A. 0. Lindvig. 243

" Although defendant's compensation as agent
for plaintiff is specified in the contract of em-
ployment, you may nevertheless find, if you be-
lieve it to be the fact, that defendant rendered
services to the plaintiff of a character different
from that provided for in said contract of em-
ployment; and if you so find, then I instruct
you that defendant is entitled to a reasonable
compensation for such services."

40. In refusing to give instruction No, 26, re-
quested by the defendant, and reading:

"I instruct }^ou that the defendant is entitled
to a reasonable compensation for all services
not covered by the contract of June 29, 1914.
In determining the value of such services you
are not confined to the amounts retained by the
defendant in the respective instances, but may
consider the value placed by defendant upon
such services as one of the circumstances de-
termining, with all the other circumstances sur-
rounding such services, what wTould be a reason-
able compensation, which may be less or greater
than the sums retained by defendant. In case
the sum total of the amounts determined by you
to be reasonable in each instance aggregates a
sum equal to or greater than the sum of $70,-
582.72, your verdict must be for the defendant."

41. In refusing to give instruction No. 28, re-
quested by the defendant, and reading :

"I instruct you that the contract of June 29,
1914, between plaintiff and defendant, was an
agreement with regard to a proposed steamship

244 C. Henry Smith

line to operate steamers between Mexican and
Central American ports, and West Coast of
United States as well as British Columbia, and
that such agreement does not govern the value
of services connected with a steamship line
operating steamers between South American
ports and the West Coast of the United States
or British Columbia. That defendant is en-
titled to a reasonable compensation for any
services performed by him for plaintiff in con-
nection with steamers plying between [192]
ports of the United States or British Columbia
and South American ports."

42. In refusing to give instruction No. 19, re-
quested by the defendant, and reading :

" Whenever the circumstances under which
services were rendered, and the character of the
services performed, create a legal liability to
pay on the part of the person for whose benefit
the services were performed, the law implies a
promise to pay for such services; and the re-
quest necessary to support such promise may be
inferred from the beneficial nature of the ser-
vices and the circumstances of the transaction.' '

43. In refusing to give instruction No. 13 re-
quested by the defendant, and reading :

"If you find that defendant w7as to receive a
commission for contracts made for the benefit
of plaintiff and that, during the term of his
agency, he procured contracts for the benefit of
plaintiff, I instruct you that defendant is en-
titled to commissions not merely on the con-

vs. A. 0. Lindvig. 245

tracts which were performed before the ter-
mination of the defendant's agency, but that de-
fendant is also entitled to commissions on all
contracts secured by him, and performed, or to
be performed, by plaintiff subsequent to the ter-
mination of defendant's agency."

44. In refusing to give instruction No. 20, re-
quested by the defendant, and reading:

"As to the item of $2,049.65 as defendant's
commission on the inward freight of the "Gov-
ernor Forbes,' I charge you as a matter of law
that your verdict should be in favor of the de-
fendant. ' '

45. In refusing to give instruction No. 14, re-
quested by the defendant, and reading:

"The bill of particulars filed by the plaintiff
herein is to be considered as an amplification of
his complaint, and said bill of particulars spe-
cifically disputes the following items in the de-
fendant's accounts:

1. Remuneration re contract of

'Regulus' $ 6,000.00

2. Remuneration re contract of

'Romules' 10,000.00

3. Commission on purchase of

' Governor Forbes' 6,800.00

4. Commission of 'Sinaloa' Sal-

vage 3,165,27

5. Commission Dupont Powder Co.. 25,517.80

6. Commission on inward freight of

'Governor Forbes' 2,049.65

[193]

246 C. Henry Smith

7. Retention of balance Btated by
Mr. Smith as an estimated
amount for procuring bookings
of freight prior to Oct. 1, 1917. .$5,000.00
The above mentioned disputed items total the
sum of $58,532.75, and these are the items
which are to be considered and passed upon
by you; all other items in the defendant's ac-
counts are assumed to be correct."

46. In refusing to give instruction No. 16, re-
quested by the defendant, and reading:

"The Court instructs the jury to find in
favor of the defendant as to the item of $12,050
referred to in plaintiff's bill of particulars,
for the details of which it is therein stated
that the plaintiff has sent to Christiania. "

47. In refusing to give instruction No. 15, re-
quested by the defendant, and reading:

"The defendant is entitled to recover a com-
mission on the purchase of the * Governor
Forbes' notwithstanding he may have entered
into an agreement for the purchase of said,
vessel in November, 1916, and notwithstanding
the payment of her purchase price, may have
been completed in the Spring of 1917, pro-
vided you believe from the evidence that the
services rendered by the defendant in connec-
tion with the cablegrams exchanged between
him and the plaintiff entitled him to such a
commission, and provided you believe that the
omission to enter said commission upon any
of the accounts presented to the plaintiff prior

vs. A. 0. Lindvig. 247

to October 1, 1917, was due to inadvertence
and mistake."

48. In refusing to give instruction No. 17, re-
quested by the defendant, and reading:

"I charge you that the agency contract en-
tered into by and between A. 0. Lindvig and
C. Henry Smith on June 29, 1914, had sole
reference to C. Henry Smith acting as the
agent for the 'A/S Baja California' in the
operation of steamers between Mexican, Cen-
tral America, West Coast of United States,
and British Columbia ports ; and I instruct you
that the services rendered by C. Henry Smith
in contracting for, and supervising the con-
struction of the ' Romulus' and 'Regulus,' and
in purchasing the ' Governor Forbes,' were not
included within his duties as agent under said
contract of June 29, 1914."

49. In refusing to give instruction No. 23, re-
quested by the defendant, and reading:

"I instruct you that it is not necessary for
the defendant [194] to prove an express
promise by the plaintiff to compensate the
defendant for his services in connection with
the contracting and building of the 'Regulus'
and ' Romulus.' It is sufficient for the defend-
ant if he proves in this behalf that the services
rendered by him in connection with the con-
tracting and building of said vessels were out-
side of the scope of his duties under the agency
contract of June 29, 1914, and that his services
in connection with the contracting and building

248 C. Henry Smith

of said vessels were beneficial to the plaintiff,
and were of such a nature, and rendered under
such circumstances as to imply a promise upon
the part of the plaintiff to pay for such
services.' '
50. In refusing to give instruction No. 24, re-
quested by the defendant, and reading:

" If you believe from the evidence in this
case that prior to the termination of the de-
fendant's agency the employees of the defend-
ant engaged cargo for sailings scheduled to
occur within a few days subsequent to the
termination of the defendant's agency, and
that upon the termination of the defendant's
agency his former employees removed to the
newly established office of the plaintiff all
records of such cargo engagements, and that
thereafter wThen demand was made by the de-
fendant upon the plaintiff for a statement of
the cargo booked prior to the termination of
the defendant's agency, the defendant at first
denied that any cargo excepting a shipment of
lumber by the defendant had been booked prior
to the termination of the defendant's agency,
and that thereafter and as a result of the de-
fendant's demands the plaintiff admitted that
some cargo had been booked but failed to dis-
close the entire amount of cargo booked, prior
to the termination of the defendant's agency,
then, and under such circumstances, I charge
you that the burden of proof is upon the plain-
tiff to show that the defendant has retained as

vs. A. 0. Lindvig. 249

payment of his commission on freight booked
prior to the termination of his agency, an
amount greater than the defendant is entitled
to as his commissions upon the freight engaged
prior to the termination of the defendant's
agency. ' '

51. In directing the jury to find a verdict in
favor of the plaintiff.

52. In entering judgment against the defendant
on the verdict.

WHEREFORE the said defendant and plaintiff
in error prays that the judgment of the said Court
be reversed.

ANDROS & HENGSTLER,
GOODFELLOW, EELLS, MOORE &
ORRICK,

Attorneys for the Defendant.

[Endorsed] : Filed Dec. 12, 1919. W. B. Maling,
Clerk. By J. A. Schaertzer, Deputy Clerk. [195]

In the District Court of the United States in and
for the Southern Division of the Northern
Division of California, Division Two.

No. 16,124.
A. O. LINDVIG,

Plaintiff,
vs.
C. HENRY SMITH,

Defendant.

250 C. Henry Smith

Order Allowing Writ of Error and Fixing Amount

of Bond.

The defendant having filed herein and presented
herewith a petition for writ of error, and an assign-
ment of errors:

NOW, THEREFORE, on motion of Messrs.
Andros & Hengstler, and Messrs. Goodfellow, Eells,
Moore & Or rick, attorneys for the defendant, IT IS
ORDERED that a writ of error be, and the same is
hereby allowed for the review of the judgment and
verdict entered herein on the 13th day of June,
1919, by the United States Circuit Court of Appeals
for the Ninth Circuit, and that the amount of the
bond on said writ of error be, and the same is
hereby fixed at the sum of Twenty Thousand
Dollars ($20,000), and that upon the giving of such
bond all further proceedings in this court be sus-
pended, stayed and superseded pending the de-
termination of said writ of error by the United
States Circuit Court of Appeals for the Ninth
Circuit.

Dated: San Francisco, California, December 12,
1919.

WM. C. VAN FLEET,
United States District Judge.

[Endorsed] : Filed Dec. 12, 1919. W. B. Maling,
Clerk. By J. A. Schaertzer, Deputy Clerk. [196]

vs. A. 0. Lindvig. 251

In the District Court of the United States in and
for the Southern Division of the Northern
District of California, Division Two.

No. 16,124.

A. O. LINDVIG,

Plaintiff,
vs.
C. HENRY SMITH,

Defendant.

Bond on Writ of Error.

KNOW ALL MEN BY THESE PRESENTS:
That we, C. Henry Smith as principal, and Globe
Indemnity Company, a corporation, incorporated
and existing under and by virtue of the laws of the
State of Newr York, doing and authorized to do
business in the State of California, as surety, are
held and firmly bound unto A. O. Lindvig in the
full and just sum of Twenty Thousand ($20,000)
Dollars to be paid to said A. O. Lindvig, to which
payment well and truly to be made we bind our-
selves jointly and severally by these presents.

Sealed wTith our seals and dated this 12th day
of December, 1919.

Whereas, lately in the District Court of the
United States in and for the Southern Division of
the Northern District of California, Second Di-
vision, a judgment was rendered against the de-
fendant above named, and said defendant having
obtained from said court a writ of error to the
United States Circuit Court of Appeals for the

252 C. Henry Smith

Ninth Circuit to reverse said judgment:

NOW, THEREFORE, the condition of the above
obligation [197] is such that if C. Henry Smith
shall prosecute such writ of error to effect and
answer all damages and costs if he fails to make
his plea good, then the above obligation shall be
void; otherwise to remain in full force and effect.

HENRY C. SMITH,

Principal.
[Seal] GLOBE INDEMNITY COMPANY,
By FRANK M. HALL, (Seal)

Attorney in Fact.
By DAVID DUNCAN,

Attorney in Fact.
The foregoing bond both as to form and suffi-
ciency of surety is hereby approved.

WM. C. VAN FLEET,
United States District Judge.

[Endorsed] : Filed Dec. 12, 1919. Walter B. Mal-
ing, Clerk. [198]

(Title of Court and Cause.)

Praecipe for Record on Writ of Error.
To the Clerk of said Court :

Sir: Please prepare transcript on writ of error
as follows:
Complaint.
Amended answer.
All bills of particulars.
Verdict.
Judgment.

vs. A. 0. Lindvig. 253

Bill of exceptions.

Petition for writ of error.

Assignments of errors.

Order allowing writ of error.

Bond on writ of error.

Minute order of June 13, 1919.

Writ of error, and

Citation on writ of error.

Exceptions to alleged bill of particulars, etc.

Minute order of January 7th, 1918.

ANDROS & HENGSTLER,

GOODFELLOW, EELLS, MOORE & OR-
RICK,

Attorneys for Defendant.

[Endorsed] : Filed Apr. 9, 1921. W. B. Mating,
Clerk. By J. A. Schaertzer, Deputy Clerk. [199]

In the Southern Division of the United States Dis-
trict Court, in and for the Northern District of
California, Second Division.

No. 16,124.
A. O. LINDVIG,

Plaintiff,

vs.

C. HENRY SMITH,

Defendant,

Certificate of Clerk U. S. District Court to Record on
Writ of Error.
I, Walter B. Mating, Clerk of the District Court
of the United States, for the Northern District oi

254 C. Henry Smith

California, do hereby certify the foregoing one
hundred ninety-nine (199) pages, numbered from 1
to 199, inclusive, to be full, true and correct copies
of the record and proceedings as enumerated in the
praecipe for record on writ of error, as the same
remain on file and of record in the above-entitled
cause, in the office of the clerk of said Court, and
that the same constitute the return to the annexed
writ of error.

I further certify that the cost of the foregoing
return to writ of error is $90.60; that said amount
was paid by the defendant, and that the original
writ of error and citation issued in said cause are
hereto annexed.

IN WITNESS WHEREOF, I have hereunto set
my hand and affixed the seal of said District Court
this 9th day of May, A. D. 1921.

[Seal] WALTER B. MALING,

Clerk United States District Court for the North-
ern District of California. [200]

Writ of Error.
UNITED STATES OF AMERICA— ss.

The President of the United States of America, to

the Honorable, the Judges of the District Court

of the United States for the Northern District

of California, Second Division, GREETING:

Because, in the record and proceedings, as also

in the rendition of the judgment of a plea which is

in the said District Court, before you, or some of

you, between C. Henry Smith, plaintiff in error,

vs. A. 0. Lindvig. 255

and A. O. Lindvig, defendant in error, a manifest
error hath happened, to the great damage of the
said C. Henry Smith, plaintiff in error, as by his
complaint appears:

We, being willing that error, if any hath been,
should be duly corrected, and full and speedy
justice done to the parties aforesaid in this behalf,
do command you, if judgment be therein given, that
then, under your seal, distinctly and openly, you
send the record and proceedings aforesaid, with all
things concerning the same, to the United States
Circuit Court of Appeals for the Ninth Circuitr
together with this writ, so that you have the
same at the City of San Francisco, in the
State of California, within thirty days from the
date hereof, in the said Circuit Court of Appeals, to
be then and there held, that, the record and pro-
ceedings aforesaid being inspected, the said Cir-
cuit Court of Appeals may cause further to be
done therein to correct that error, what of right,
and according to the laws and customs of the United
States should be done.

WITNESS, the Honorable EDWARD D.
WHITE, Chief Justice of the United States, the
12th day of December, in the year of our Lord one
thousand nine hundred and nineteen.

[Seal] WALTER B. MALING,

Clerk of the United States District Court, North-
ern District of California.

By J. A. Schaertzer,

Deputy Clerk.

256 <7. Henry Smith

Allowed by

WM. C. VAN FLEET,
United States District Judge. [201]
Receipt of a copy of the within writ of error is
hereby admitted this 12th day of December, 1919.

NATHAN H. FRANK,
IRVING H. FRANK,
Attorneys for Defendant in Error.

[Endorsed]: No. 16,124. United States District
Court for the Northern District of California. C.
Henry Smith, Plaintiff in Error, vs. A. 0. Lindvig,
Defendant in Error. Writ of Error. Filed Dec.
13, 1919. W. B. Maling, Clerk. By J. A. Schaert-
zer, Deputy Clerk.

Return to Writ of Error.

The answer of the Judge of the District Court of
the United States, in and for the Northern District
of California, Second Division.

The record and all proceedings of the plaint
whereof mention is within made, with all things
touching the same, we certify under the seal of our
said Court, to the United States Circuit Court of
Appeals for the Ninth Circuit, within mentioned,
at the day of place within contained, in a certain
schedule to this writ annexed as within wTe are com-
manded.

By the Court.

[Seal] WALTER B. MALING,

Clerk United States District Court, Northern Dis-
trict of California. [202]

vs. A. 0. Lindvig. 257

Citation on Writ of Error.

UNITED STATES OF AMERICA— ss.
The President of the United States, to A. O. Lind-
vig, GREETING:
You are hereby cited and admonished to be and
appear at a United States Circuit Court of Appeals
for the Ninth Circuit, to be holden at the City of
San Francisco, in the State of California, within
thirty days from the date hereof, pursuant to a writ
of error duly issued and now on file on the Clerk's
Office of the United States District Court for the
Northern District of California, Second Division*
wherein C. Henry Smith is the plaintiff in error,
and you are defendant in error, to show cause, if
any there be, why the judgment rendered against
the said plaintiff in error, as in the said writ of
error mentioned, should not be corrected, and why
speedy justice should not be done to the parties in
that behalf.

WITNESS, the Honorable WILLIAM C. VAN
FLEET, United States District Judge for the
Northern District of California, this 12th day of
December, A. D. 1919.

WM. C. VAN FLEET,
United States District Judge. [203]
Receipt of a copy of the within Citation on Writ
of Error is hereby admitted this 12th day of Decem-
ber, 1919.

NATHAN H. FRANK,
IRVING H. FRANK,
Attorneys for Defendant in Error.

258 <7. Henry Smith

[Endorsed]: No. 16,124. United States District
Court for the Northern District of California. C.
Henry C. Smith, Plaintiff in Error, vs. A. O. Lindvig,
Defendant in Error. Citation on Writ of Error.
Filed Dec. 13, 1919. W. B. Maling, Clerk. By
J. A. Schaertzer, Deputy Clerk.

[Endorsed]: No. 3681. United States Circuit
Court of Appeals for the Ninth Circuit. C. Henry
Smith, Plaintiff in Error, vs. A. 0. Lindvig, De-
fendant in Error. Transcript of Record. Upon
Writ of Error to the Southern Division of the
United States District Court of the Northern Dis-
trict of California, Second Division.
Filed May 9, 1921.

F. D. MONCKTON,
Clerk of the United States Circuit Court of Ap-
peals for the Ninth Circuit.

By Paul P. O'Brien,

Deputy Clerk.

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. 0. LINDVIG,

Defendant in Error.

vs. A. 0. Lindvig. 259

Order Extending Time to and Including February
10, 1920, Within Which to File Record and
Docket Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of plain-
tiff in error above named within which to print the
record and file and docket this cause on writ of error
in the United States Circuit Court of Appeals for
the Ninth Circuit, be, and the same is hereby, ex-
tended to and including the 10th day of February,
1920.

Dated : January 10, 1920.

W. H. HUNT,
Judge of the United States Circuit Court of Appeals
for the Ninth Circuit.

[Endorsed] : No. 3681. In the United States Cir-
cuit Court of Appeals, for the Ninth Circuit. C.
Henry Smith, Plaintiff in Error, vs. A. O. Lindvig,
Defendant in Error. Order Extending Time to and
Including February 10, 1920, Within Which to File
Record and Docket Cause. Filed Jan. 10, 1920. F.
D. Monckton, Clerk. Refiled Apr. 28, 1921. F. D.
Monckton, Clerk.

260 C. Henry Smith

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. O. LINDVIG,

Defendant in Error.

Order Extending time to and Including March 10,
1920, Within Which to File Record and Docket
Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of plain-
tiff in error above named within which to print the
record and file and docket this cause on writ of error
in the United States Circuit Court of Appeals for the
Ninth Circuit be, and the same is hereby, extended
to and including the 10th day of March, 1920.
Dated February 9, 1920.

W. H. HUNT,
Judge of the United States Circuit Court of Appeals
for the Ninth Circuit.

[Endorsed] : No. — . In the United States Circuit
Court of Appeals, for the Ninth Circuit. C. Henry
Smith, Plaintiff in Error, vs. A. O. Lindvig, Defend-
ant in Error. Order Extending Time to and Includ-
ing March 10, 1920, Within Which to File, Record
and Docket Cause. Filed Feb. 9, 1920. F. D. Monck-
ton, Clerk.

vs. A. 0. Lindvig. 261

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. 0. LINDVIG,

Defendant in Error.

Order Extending Time to and Including April 10,
1920, Within Which to File Record and Docket
Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of plain-
tiff in error above named within which to print the
record and file and docket this cause on writ of error
in the United States Court of Appeals for the Ninth
Circuit, be, and same is hereby, extended to and in-
cluding the 10th day of April, 1920.
Dated March 9, 1920.

WM. H. HUNT,
Judge of the United States Circuit Court of Appeals
for the Ninth Circuit.

[Endorsed] : No. . In the Circuit Court of

Appeals for the Ninth Circuit. C. Henry Smith,
Plaintiff in Error, vs. A. O. Lindvig, Defendant in
Error. Order Extending Time to and Including
April 10, 1920, Within Which to File Record and
Docket Cause. Filed Mar. 9, 1920. F. D. Monckton,
Clerk.

262 C. Henry Smith

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. O. LINDVIG,

Defendant in Error.

Order Extending Time to and Including May 10,
1920, Within Which to File Record and Docket
Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of plain-
tiff in error above named within which to print the
record and file and docket this cause on writ of error
in the United States Circuit Court of Appeals for
the Ninth Circuit, be, and same is hereby, extended
to and including the 10th day of May, 1920.
Dated: April 9, 1920.

WM. H. HUNT,
Judge of the United States Circuit Court of Appeals
for the Ninth Circuit.

[Endorsed] : No. . In the United States

Circuit Court of Appeals, for the Ninth Circuit. C.
Henry Smith, Plaintiff in Error, vs. A. O. Lindvig,
Defendant in Error. Order Extending Time. Filed
Apr. 9, 1920. F. D. Monckton, Clerk.

vs. A. 0. Lindvig. 263

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. 0. LINDVIG,

Defendant in Error.

Order Extending Time to and Including June 10,
1920, Within Which to File Record and Docket
Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of plain-
tiff in error above named within which to print the
record and file and docket this cause on writ of
error in the United States Circuit Court of Appeals
for the Ninth Circuit, be, and the same is hereby
extended to and including the 10th day of June, 1920.
Dated: May 10, 1920.

W. H. HUNT,
Judge of the United States Circuit Court of Appeals
for the Ninth Circuit.

[Endorsed] : No. . In the United States

Circuit Court of Appeals, for the Ninth Circuit.

C. Henry Smith, Plaintiff in Error, vs. A. O. Lind-
vig, Defendant in Error. Order Extending Time
to and Including June 10, 1920, Within Which to File
Record and Docket Cause. Filed May 10, 1920. F.

D. Monckton, Clerk.

264 C. Henry Smith

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. O. LINDVIG,

Defendant in Error.

Order Extending Time to and Including July 10r
1920, Within Which to File Record and Docket
Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of plain-
tiff in error above named within which to print the
record and file and docket this cause on writ of error
in the United States Circuit Court of Appeals for the
Ninth Circuit, be, and the same is hereby, extended
to and including the 10th day of July, 1920.
Dated : June 9, 1920.

HUNT,
Judge of the United States Circuit Court of Appeals
for the Ninth Circuit.

[Endorsed] : No. . In the United States

Circuit Court of Appeals for the Ninth Circuit.

C. Henry Smith, Plaintiff in Error, vs. A. O. Lind-
vig, Defendant in Error. Order Extending Time
to and Including July 10, 1920, Within Which to File
Record and Docket Cause. Filed Jun. 9, 1920. F.

D. Monckton, Clerk.

vs. A. 0. Lindvig. 265

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. O. LINDVIG,

Defendant in Error.

Order Extending Time to and Including August 10,
1920, Within Which to File Record and Docket
Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of plain-
tiff in error above named within which to print the
record and file and docket this cause on writ of error
in the United States Circuit Court of Appeals for the
Ninth Circuit, be, and same is hereby, extended to
and including the 10th day of August, 1920.
Dated: July 10, 1920.

WM. W. MORROW,
Judge of the United States Circuit Court of Appeals,
for the Ninth Circuit.

[Endorsed] : No. . In the United States

Circuit Court of Appeals for the Ninth Circuit.
C. Henry Smith, Plaintiff in Error, vs. A. O. Lind-
vig, Defendant in Error. Order Extending Time
of Plaintiff Within Which to Pile and Docket Cause.

Piled Jul. 10, 1920. F. D. Monckton, Clerk.

366 C. Henry Smith

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

C. HENRY SMITH,

Plaintiff in Error,

vs.

A. O. LINDVIG,

Defendant in Error.

Order Extending Time to and Including September
10, 1920, Within Which to File Record and
Docket Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of
plaintiff in error above named within which to
print the record and file and docket this cause on
writ of error in the United States Circuit Court of
Appeals for the Ninth Circuit be, and the same is
hereby, extended to and including the 10th day of
September, 1920.
Dated: August 10, 1920.

WM. W. MORROW,
Judge of the United States Circuit Court of Ap-
peals for the Ninth Circuit.

[Endorsed] : No. . In the United States

Circuit Court of Appeals, for the Ninth Circuit.
C. Henry Smith, Plaintiff in Error, vs. A. O. Lind-
vig, Defendant in Error. Order Extending Time
to and Including September 10, 1920, Within Which
to File Record and Docket Cause. Filed Aug. 10,
1920. F. D. Monckton, Clerk.

vs. A. 0. Lindvig. 267

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

C. HENRY SMITH,

Plaintiff in Error,

vs.

A. 0. LINDVIG,

Defendant in Error.

Order Extending Time to and Including October 9,
1920, Within Which to File Record and Docket
Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of
plaintiff in error above named within which to
print the record and file and docket this cause on
writ of error in the United States Circuit Court of
Appeals for the Ninth Circuit be, and the same is
hereby extended to and including the 9th day of
October, 1920.
Dated: September 8, 1920.

WM. W. MORROW,
Judge of the United States Circuit Court of Ap-
peals for the Ninth Circuit.

[Endorsed] : No. . In the United States

Circuit Court of Appeals, for the Ninth Circuit.
C. Henry Smith, Plaintiff in Error, vs. A. 0. Lind-
vig, Defendant in Error. Order Extending Time
to and Including October 9, 1920, Within Which to
Pile Record and Docket Cause. Filed Sep. 8, 1920.
F. D. Monckton, Clerk.

268 C. Henry Smith

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

C. HENRY SMITH,

vs.
A. 0. LINDVIG,

Plaintiff in Error,

Defendant in Error.

Order Extending Time to and Including November 9,
1920, Within Which to File Record and Docket
Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of
plaintiff in error above named within which to
print the record and file and docket this cause on
writ of error in the United States Circuit Court of
Appeals for the Ninth Circuit be, and the same is
hereby, extended to and including the 9th day of
November, 1920.
Dated October 7, 1920.

WM. W. MORROW,
Judge of the United States Circuit Court of Ap-
peals for the Ninth Circuit.

[Endorsed] : No. . In the United States

Circuit Court of Appeals, for the Ninth Circuit.
C. Henry Smith, Plaintiff in Error, vs. A. O. Lind-
vig, Defendant in Error. Order Extending Time
to and Including November 9, 1920, Within Which
to File Record and Docket Cause. Filed Oct. 7,
1920. F. D. Monckton, Clerk.

vs. A. 0. Lindvig. 269

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

No. .

C. HENRY SMITH,

vs.
A. 0. LINDVIG,

Plaintiff in Error,

Defendant in Error.

Order Extending Time to and Including December 5,

1920, Within Which to File Record and Docket

Cause.

GOOD CAUSE APPEARING THEREFOR:

IT IS HEREBY ORDERED that the time of

plaintiff in error above named within which to

print the record and file and docket this cause on

writ of error in the United States Circuit Court of

Appeals for the Ninth Circuit be, and the same is

hereby, extended to and including the 5th day of

December, 1920.

Dated: November 9, 1920.

W. H. HUNT,
Judge of the United States Circuit Court of Ap-
peals, for the Ninth Circuit.

[Endorsed] : No. . In the United States

Circuit Court of Appeals for the Ninth Circuit.
C. Henry Smith, Plaintiff in Error, vs. A. O. Lind-
vig, Defendant in Error. Order Extending Time
to and Including December 5, 1920, Within Which
to File Record and Docket Cause. Piled Nov. 9,
1920. F. D. Monckton, Clerk.

270 C. Henry Smith

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. 0. LINDVIG,

Defendant in Error.

Order Extending Time to and Including January 8,

1921, Within Which to File Record and Docket

Cause.

GOOD CAUSE APPEARING THEREFOR:

IT IS HEREBY ORDERED that the time of

plaintiff in error above named within which to

print the record and file and docket this cause on

writ of error in the United States Circuit Court of

Appeals for the Ninth Circuit be, and the same is

hereby, extended to and including the 8th day of

January, 1921.

Dated: December 9, 1920.

W. H. HUNT,
Judge of the United States Circuit Court of Ap-
peals for the Ninth Circuit.

[Endorsed] : No. . In the United States

Circuit Court of Appeals for the Ninth Circuit.
0. Henry Smith, Plff. in Error, vs. A. O. Lindvig,
Deft, in Error. Order Extending Time to Pile
Record and Docket Cause. Piled Dec. 9, 1920. F.

D. Monckton, Clerk.

vs. A. 0. Lindvig. 271

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

No. 16,124.

C. HENEY SMITH,

Plaintiff in Error,
ve.

A. 0. LINDVIG,

Defendant in Error.

Order Extending Time to and Including February 8,
1921, Within Which to File Record and Docket
Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of
plaintiff in error above named within which to
print the record and file and docket this cause on
writ of error in the United States Circuit Court of
Appeals for the Ninth Circuit be, and the same is
hereby, extended to and including the 8th day of
February, 1921.
Dated: January 7, 1921.

W. H. HUNT,
Judge of the United States Circuit Court of Ap-
peals for the Ninth Circuit.

[Endorsed] : No. . In the United States

Circuit Court of Appeals, for the Ninth Circuit.
C. Henry Smith, Plaintiff in Error, vs. A. 0. Lind-
vig, Defendant in Error. Order Extending Time

to and Including February , 1921, Within

Which to File Record and Docket Cause. Filed
Jan. 7, 1921. F. D. Monckton, Clerk.

272 C. Henry Smith

lu the United States Circuit Court of Appeals, for
the Ninth Circuit.

No. 16,124.

C. HENEY SMITH,

Plaintiff in Error,
vs.
A. 0. LINDVIG,

Defendant in Error.

Order Extending Time to and Including March 8,
1921, Within Which to File Record and Docket
Cause.

GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of
plaintiff in error above named within which to
print the record and file and docket this cause on
writ of error in the United States Circuit Court of
Appeals for the Ninth Circuit be, and the same is
hereby, extended to and including the 8th day of
March, 1921.

Dated: February 5, 1921.

HUNT,
Judge of the United States Circuit Court of Ap-
peals, for the Ninth Circuit.

[Endorsed]: No. 16,124. Circuit Court of the
United States for the Ninth Circuit. C. Henry
Smith, Plaintiff in Error, vs. A. 0. Lindvig, Defend-
ant in Error. Order Under Subdivision 1 of Rule
16 Enlarging Time to and Including Mar. 8, 1921,
to File Record and Docket Cause. Filed Feb. 5,
1921. F. D. Monckton, Clerk.

vs. A. 0. Lindvig. 273

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

No. 16,124.

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. 0. LINDVIG,

Defendant in Error.

Order Extending Time to and Including April 8,

1921, Within Which to File Record and Docket

Cause.

GOOD CAUSE APPEARING THEREFOR:

IT IS HEREBY ORDERED that the time of

plaintiff in error above named within which to

print the record and file and docket this cause on

writ of error in the United States Circuit Court of

Appeals for the Ninth Circuit be, and the same

is hereby, extended to and including the 8th day

of April, 1921.

Dated: March 5, 1921.

W. H. HUNT,
Judge of the United States Circuit Court of Ap-
peals for the Ninth Circuit.
Receipt of a copy of the within order is hereby
admitted this 5th day of March, 1921.

NATHAN H. FRANK,
IRVING H. FRANK,
Attorneys for Defendant in Error.

[Endorsed]: No. 16,124. In the United States
Circuit Court of Appeals, for the Ninth Circuit.

274 G. Henry Smith

C. Henry Smith, Plaintiff in Error, vs. A. 0. Lind-
vig, Defendant in Error. Order Extending Time
to and Including April 8, 1921, Within Which to
Bile Record and Docket Cause. Filed Mar. 8,
1921. P. D. Monckton, Clerk.

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

No. 16,124.

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. O. LINDVIG,

Defendant in Error.

Order Extending Time to and Including April 21st,
1921, Within Which to File Record and Docket
Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of
plaintiff in error above named within which to
file and docket this cause on writ of error in the
United States Circuit Court of Appeals for the
Ninth Circuit be, and the same is hereby, extended
to and including the 21st day of April, 1921.
Dated: April 8, 1921.

WM. H. HUNT,
Judge of the United States Circuit Court of Ap-
peals for the Ninth Circuit.

vs. A. 0. Lindvig. 275

Receipt of a copy of within order acknowledged
this 8th day of April, 1921.

NATHAN H. FRANK,
IRVING H. PRANK,
Attorneys for Defendant in Error.

[Endorsed] : No. . In the United States Cir-
cuit Court of Appeals for the Ninth Circuit. C.
Henry Smith, Plaintiff in Error, vs. A. O. Lindvig,
Defendant in Error. Order Under Subdivision 1 of
Rule 16 Enlarging Time to and Including April 21,
1921, to File Record and Docket Cause. Filed Apr.
9, 1921. F. D. Monckton, Clerk.

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

No. .

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. 0. LINDVIG,

Defendant in Error.

Order Extending Time to and Including April 26,
1921, to File Record and Docket Cause.
GOOD CAUSE APPEARING THEREFOR:
IT IS HEREBY ORDERED that the time of
plaintiff in error above named within which to
file the record and docket this cause on
writ of error in the United States Circuit Court of
Appeals for the Ninth Circuit be, and the same

276 C. Henry Smith

is hereby, enlarged and extended to and including
the 26th day of April, 1921.
Dated: April 19th, 1921.

W. H. HUNT,
Judge of the United States Circuit Court of Ap-
peals for the Ninth Circuit.

[Endorsed] : No. . In the United States

Circuit Court of Appeals, for the Ninth Circuit.
C. Henry Smith, Plaintiff in Error, vs. A. O. Lind-
vig, Defendant in Error. Order Under Subdivi-
sion 1 of Rule 16 Enlarging Time to and Including
April 26, 1921, to File Record and Docket Cause.
Filed Apr. 19, 1921. F. D. Monckton, Clerk.

In the United States Circuit Court of Appeals, for
the Ninth Circuit.

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. 0. LINDVIG,

Defendant in Error.

Order Extending Time to and Including May 4, 1921,
to File Record and Docket Cause.
GOOD CAUSE APPEARING, IT IS HERE-
BY ORDERED that the time of plaintiff in error
above named within which to file the record and
docket this cause on writ of error in the Circuit
Court of Appeals for the Ninth Circuit be, and the
same is hereby, enlarged and extended to and in-
cluding the 4th day of May, A. D. 1921.

vs. A. 0. Lindvig. 277

Dated: this 25th day of April, A. D. 1921.

W. H. HUNT,

Judge of the United States Circuit Court of Ap-
peals for the Ninth Circuit.

[Endorsed] : No. . United States Circuit

Court of Appeals for the Ninth Circuit. Order
Under Subdivision 1 of Rule 16 Enlarging Time to
and Including May 4, 1921, to File Record and
Docket Cause. Filed Apr. 25, 1921. F. D. Monck-
ton, Clerk.

At a stated term, to wit, the October Term, A. D.
1920, of the United States Circuit Court of
Appeals for the Ninth Circuit, held in the
courtroom thereof, in the City and County of
San Francisco, in the State of California, on
Wednesday, the fourth day of May, in the year
of our Lord one thousand nine hundred and
twenty-one. Present: The Honorable WILL-
IAM B. GILBERT, Senior Circuit Judge,
Presiding; The Honorable ERSKINE M.
ROSS, Circuit Judge; The Honorable WILL-
IAM H. HUNT, Circuit Judge.

No. 3681.

C. HENRY SMITH,

Plaintiff in Error,
vs.
A. O. LINDVIG,

Defendant in Error.

278 C. Henry Smith

Order Extending Time to and Including May 10,
1921, to File Record and Docket Cause.
Upon motion of Mr. F. W. Dorr, on behalf of
counsel for the plaintiff in error, Mr. Irving Frank,
counsel for the defendant in error, opposing said
motion, and good cause therefor appearing,
ORDERED time of plaintiff in error to file the
record and docket the cause in the above-entitled
cause be, and the same is hereby enlarged and ex-
tended to and including May 10, 1921.

No. 3681

IN THE

United States Circuit Court of Appeals

For the Ninth Circuit

Henry

vs.

Smith,

Plaintiff in

Error,

0. LlNDVIG,

Defendant in

Error.

BRIEF FOR PLAINTIFF IN ERROR.

Andros & Hengstler,
goodfellow, eells, moore & orrick,
Attorneys for Plaintiff in Error.

FILED

: MAY 2 1 1921

P. O. MONCKTON,
OUKilC

Table of Contents.

Page
I. Statement of the case 1

(1) "Regulus": A charge of $6000.00, for contracting
and superintending construction 4

(2) "Romulus": A charge of $10,000.00 for con-
tracting and superintending construction 5

(3) "Governor Forbes": Commission on purchase,
$6,800.00 5

(4) "Sinaloa": A charge of $3165.27 for services in
connection with salving and repairing of the
steamer 6

(5) Commission on contract with Dupont de Nemours
Company, amounting to $25,517.80 6

(6) A balance of estimated freight earnings of
$5000.00 7

(7) The commission on the inward freight of "Gov-
ernor Forbes"— $2049.65 7

II. The questions involved and errors relied upon. ... 8

III. The argument 11

First: The fact that the directed verdict is in
excess of plaintiff's claim by $12,050, entitles
defendant to a reversal of the judgment. ... 11

1. As to the object and effect of a bill of par-
ticulars 11

2. Plaintiff could not prove damages in excess

of $58,532.72 12

3. The amount of the judgment recoverable by
plaintiff was limited to $58,532.72 13

4. The directed verdict for $70,582.72 should be
reversed 14

Second: Even on the assumption that the con-
struction OF THE CONTRACT, AS ADOPTED BY THE

court, is correct, the "regulus", "romulus",
"Governor Forbes" and "Sinaloa" services

ii Table of Contents

Page
AKK NOT MATTERS OP LAW, BUT MATTERS FOR THE
DETERMINATION OP A JURY 16

Third: The construction op the agreement in con-
nection WITH OUTSIDE SERVICES: DEPENDANT IS EN-
TITLED TO REASONABLE COMPENSATION THEREFOR.. 22

A. Analysis of the scope of defendant's duties.. 22

B. Principle of construction 23

C. Application to the instant case 23

D. The construction adopted by the trial court
strikes out of the agreement the specification

of defendant 's duties 26

E. The practical construction placed upon the
agreement by the plaintiff himself confirms
the contention that defendant was to receive
extra compensation for the services 28

F. Defendant was entitled to reasonable com-
pensation for the additional services 29

G. Under its own construction of the contract,
the court erred in excluding evidence of a
legal custom entitling defendant, as general
agent of the line, to reasonable compensation
for the ''Romulus", "Regulus", "Governor
Forbes ' ' and ' ' Sinaloa ' ' services 31

Fourth : The construction op the agreement rela-
tive TO commissions on freights earned by the
line out of cargo secured by defendant, but
collected by the line after expiration of de-
fendant^ term of agency, defendant is en-
titled to such commissions 32

Conclusion 37

No. 3681.

IN THE

United States Circuit Court of Appeals

For the Ninth Circuit

C. Henry Smith,

Plaintiff in Error,
vs.

A. O. Lindvig,

Defendant in Error.

BRIEF FOR PLAINTIFF IN ERROR.

I. Statement of the Case.

Defendant* was engaged at San Francisco in the
importing and exporting business since 1908. In
the latter part of 1913 he conceived the idea of
organizing a Norwegian corporation to operate
steamships between British Columbia ports, Seattle,
San Francisco, Los Angeles, and ports on the coast
of Mexico and Central America. After he and local
friends had subscribed $75,000 toward the stock of
such a corporation, he sent Captain M. O. Rustad
to Norway, for the purpose of interesting Norwe-
gian capital. While in Norway Captain Rustad

* For the sake of brevity plaintiff in error is referred to herein
as defendant, and defendant in error as plaintiff.

met plaintiff, a large ship-owner. Captain Rustad
then cabled defendant asking "if he should con-
nect with Mr. Lindvig and investigate his stand-
ing", and defendant cabled him to do so. There-
after defendant went to Norway, and on June 29,
1914, entered into the following agreement with
plaintiff :

"Mr. A. O. Lindvig, of Christiania, and Mr.
C. Henry Smith of San Francisco have this
day made the following agreement with regard
to A/S Baja California, a steamship line to
operate steamers between Mexican and Central
American Ports and the West Coast of the
United States as well as British Columbia.

For the steamship line as aforementioned
Mr. Smith is to act as general agent with
authority to appoint subagents, when required,
for securing cargo northbound and southbound,
fix charters, when sufficient inducements offer,
as well make all necessary arrangements for
docking and clearing of the steamer at the
respective ports of call.

It being also understood that the general
agent or subagents are to make contracts, at
the lowest competitive rates, for tallying and
stevedoring. On all freight earned a commis-
sion of five per cent is to be allowed Mr. Smith,
including any allowance or allowances made
to subagents — Besides this remuneration an
allowance per steamer is to be made to cover
incidentals, stamps and other disbursements
and for travelling expenses, as required, sub-
ject to special agreement.

In the event any steamer or steamers of the
A/S Baja California are fixed by Mr. Smith
for other voyages than as hereinbefore men-
tioned, or on time charter, a commission of
2!/2 per cent on the freight earned is allowed.

This agreement is to remain in force for a
period of three years, provided the line re-
ferred to above is maintained so long.
Christiania, 29th. June, 1914.

(Sgd.) A. O. Lindvig,
(Sgd.) C.Henry Smith.' '
("A/S" stands for corporation.)

(Record, p. 26.)

Two vessels were built for the company at Sun-
derland, England. These were named the "Sina-
loa" and the "Baja California". The "Sinaloa"
arrived at San Francisco in December, 1914, the
"Baja California" about a month later. These two
steamers were operated by the line during 1915 and
1916. The business increased as the result of de-
fendant's labors in securing cargo, and in the fall
of 1916 the "Governor Forbes" was purchased and
added to the line (Record, p. 145).

The plaintiff's agency terminated by his resigna-
tion on August 1, 1917, but was continued by agree-
ment with defendant until October 1, 1917. The
dividends paid by the "Baja California" from the
beginning of operations up to October 1, 1917,
were very high (Record, p. 202).

Plaintiff authorized defendant to retain remit-
tances to meet installment payments on other steam-
ers built by defendant for plaintiff.

The instant case is one wherein the plaintiff,
as principal, disputes the right of defendant, as
agent, to retain certain commissions claimed by

defendant Cor services rendered in contracting for
and superintending the construction of steamers,
in purchasing one steamer, in salving and repair-
ing another steamer, and in securing cargoes for
the steamers of the line.

The complaint claims a sum of money amount-
ing to $70,582.72, but the bill of particulars filed
by plaintiff specifies items claimed by plaintiff,
amounting to $58,532.72 (Record, pp. 9-10; Appen-
dix to this Brief, pp. 1-2).*

These items, aggregating the sum of $58,532,72,
are the following in the chronological order of their
occurrence :

(1) "Regidus": A charge of $6000.00, for con-
tracting and superintending construction.

This steamer was built on the Oakland Estuary
for its owner, Pacific Company, of which plaintiff
was managing owner, for a contract price of $450,-
000.00, at a time when vessels increased rapidly in
value so that, by the time of her completion, she
was worth two or three times her contract price.
Defendant made the contract for her construction
in December, 1915, and thereafter made many trips
to the place of her construction and gave much of
his time in superintending her construction. She
was delivered by the builder in March, 1917. For

* For convenient reference the evidence and assignments of errors
relating to $12,050 not specified in the bill of particulars, and the
disputed items in the bill of particulars, are included in an appendix
to this brief.

these services he charged the plaintiff $6000.00, being
a commission of about one and one-fourth per cent
of the contract price, a charge which plaintiff there-
after found "in order" (Record, p. 72, and Appen-
dix, pp. 5-11).

(2) "Romulus": A charge of $10,000.00 for con-
tracting and superintending construction.

This was a sister ship of the "Regulus", and
defendant had been working on the matter of se-
curing a contract since December, 1915, and, on
September, 15, 1916, as plaintiff's representative,
entered into a contract for the construction of this
steamer for $775,000.00. Thereafter defendant spent
a considerable amount of his time in going to the
Oakland Estuary, where this steamer was being
built, and in supervising the building of the steamer
in accordance with the plans. The steamer was
thereafter commandeered by the United States Gov-
ernment. For the services rendered in connection
with this steamer defendant retained the sum of
$10,000.00, being approximately one and one-fourth
per cent of the contract price (Record, pp. 91-92;
Appendix, pp. 25-30).

(3) "Governor Forbes": Commission on pur-
chase, $6800.

Defendant made arrangements to buy this steamer
in 1916 for $340,000.00, with a two per cent com-
mission. Before the purchase the plaintiff was
notified of this commission (Record, pp. 94, 145;
Appendix, pp. 30-32).

(4) "Sinaloa": A charge of $3165.27 for serv-
ices in connection with the salving and repairing
of the steamer.

Defendant offered to show that the "Sinaloa"

went aground in the fog near Cape Blanco, Men-
docino County, on June 16, 1916; that plaintiff
requested defendant to do everything possible to
save her; that defendant immediately went out to
the steamer, made contracts for salving her, co-
operated with the underwriters, disbursed the funds,
and, when she was floated, brought her to San Fran-
cisco, there submitted her to competitive bidding
for the repairs and afterwards, when the lowest
bidder failed to go on with the work, defendant
conferred with the United States Shipping Board
and arranged for the continuation of the repairs,
in order to enable the " Sinaloa7' to continue the
carrying of nitrate for Dupont de Nemours Com-
pany (Record, pp. 105-109; Appendix, pp. 32-43

For these services defendant charged the sum of
$3,165.27, wdrich remuneration was allowed in the
general average adjustment in connection with the
stranding of this steamer (Record, p. 131; Appen-
dix, p. 33).

(5) Commission on contract with Dupont de
Nemours Company, amounting to $25,517.80.

Defendant entered into a yearly contract with
Dupont de Nemours Company for the carriage
of nitrate on the return voyage north of the vessels
of the line. The last of these contracts was dated

July 10, 1917, and covered the transportation of
40,000 tons during the year June 1, 1917, to June 1,
1918. The sum of $25,517.80, retained by defend-
ant, is the five per cent commission claimed by him
on the freight earned by the Dupont de Nemours
contract under the agreement with plaintiff of June
29, 1914 (Record, pp. 110-111; Appendix, pp 43.47

(6) A balance of estimated freight earnings of
$5000.00.

This item is the five per cent commission claimed,
under the agreement of June 29, 1914, on freight
earned through cargo booked prior to October 1,
1917, but not actually loaded on board of vessels
until aft^r October 1. 1917 (Record, p. 119; Appen-
dix, pp. 47-48

(7) The commission on the inward freight of
" Governor Forbes" $2049.65.

This steamer left Guayaquil in September, 1917,
with a cargo of cocoa booked during the period of
defendant's agency, but arrived in San Francisco
on October 3rd, or 4th, 1917, being a few days later
than the termination of defendant's agency. The
sum of $2049.65 is five per cent of the freight money
claimed as commission under the agreement of June
29, 1914 (Record, p. 123T Appendix 48-49 )

The sum total of the preceding seven items is the
sum of $58,532.72 specified in the plaintiff's bill of
particulars as "the items * * * upon which this

complainl is based''. The prayer of plaintiff's com-
plaint is for $70,582.72. The difference between the
amount of the prayer in the complaint and the
amount itemized and specified in the bill of particu-
lars is the sum of $12,050.00. Defendant excepted
to the bill of particulars on the ground of its in-
sufficiency, but the exception was overruled by the
trial court, and defendant went to trial ready to
meet the issues raised by plaintiff's bill of particu-
lars, and none others (Record, p. 11).

The trial court directed a verdict in favor of the
plaintiff for the amount of $70,582.72, with interest
from October 1, 1917. The verdict rendered by the
jury, and the judgment entered in favor of the
plaintiff, was accordingly in the sum of $77,939.00.
The principal sum of the verdict exceeds the amount
specifically claimed by plaintiff in his bill of par-
ticulars by $12,050.00.

II. The Questions Involved and Errors Relied Upon.

First: Defendant contends that the court erred in
directing a verdict in excess of plaintiff's claim
by the sum of $12,050, and in entering judgment
against defendant on said verdict.

(Assignments No. 22, 23, 24, 25, 46; Appen-
dix, pp. 2-3).

Second: Even on the assumption that the construc-
tion of the contract, as adopted by the trial
court, is correct, the "Regulus", " Romulus",
"Governor Forbes" and "Sinaloa" services,
are not matters of law, but matters for the de-
termination of a jury, and it was therefore
error to direct a verdict at all.

(Assignments No. 29, 30, 31, 32, 38, 39, 40,
41, 42, 51; Record, pp. 239, 242, 249).

Third: Defendant contends that, under his con-
struction of the contract:

1. The court erred in denying him compen-
sation for his services in contracting for and
superintending the construction of the
steamer "Regulus".

(Assignments No. 1, 3, 4, 25, 26, 48, 49;
Appendix, pp. 22-25.)

2. The court erred in denying him compen-
sation for his services in contracting for and
superintending the construction of the
steamer "Romulus".

(Assignments No. 2, 48, 49; Appendix, pp.
29-30.)

3. The court erred in denying him compen-
sation for his services in connection with
the purchase of the steamer "Governor
Forbes".

(Assignments No. 5, 47, 48; Appendix, pp.
31-32.)

4. The court erred in denying him compen-
sation for his services in connection with
the salving and repairing of the steamer
"Sinaloa".

(Assignments No. 6, 7, 8, 9, 10, 11, 12, 13,
14, 15, 16, 17, 18, 19, 20, 21; Appendix,

P- 38-. 43

5. The court erred in denying him compen-
sation for securing cargo under the contract
with Dupont de Nemours Company.

(Assignments No. 33, 34, 35, 36, 43 ; Appen-
dix, p. 44-47

6. The court erred in denying him compen-
sation on cargo secured for the inward voy-
age of the steamer " Governor Forbes".

(Assignments No. 43, 44; Appendix, p.
48.)

7. The court erred in denying him compen-
sation for cargoes secured prior to Octo-
ber 1, 1917, although the freight on said cargo
was collected subsequent to said date.

(Assignments No. 43, 44; Appendix, p. 47.)

III. The Argument.

FIRST: THE FACT THAT THE DIRECTED VERDICT IS IN
EXCESS OF PLAINTIFF'S CLAIM BY $12,050, ENTITLES
DEFENDANT TO A REVERSAL OF THE JUDGMENT.

1. As to the object and effect of a bill of particulars:
The function of a bill of particulars is to amplify
the pleadings so that the claim of the party on
whom demand therefor is made may be clearly de-
fined and concisely set forth, to the end that there
may be no question as to what the claim is.

Pitleman v. F other ingham, 185 N. Y. S. 385 ;

Ames v. Bell, 5 Cal. App. 1 ; 89 Pac. 619.

A bill of particulars may limit, but not enlarge,
a claim set up in a declaration.

A. 0. Anderson Trading Co. v. Brody, 143

App. Div. 681; 184 K Y. S. 383;
Offner v. Wilke, 208 111. App. 463.

The purpose of a bill of particulars is to set forth
in detail and more minutely precise acts or omis-
sions of defendant which plaintiff claims render him
liable.

Forbes v. Benson, 103 A. 228 (R. I.).

A bill of particulars is not a pleading, and it may
restrict, but cannot enlarge, the scope of recovery
permissible under the declaration.

Cook v. Dade, 158 N. W. 175 (Mich.).

2. Plaintiff could not prove damages in excess of $58,533.72.

The office of a bill of particulars is not only to

define and limit the issues, but also to apprise the

opposing parties of what they have to meet at

THE TRIAL.

Tompson v. Be Visser, 106 Misc. Rep. 165;
175 N. Y. S. 276.

Defendant did not have to meet, at the trial, the
apocryphal claim for $12,050.

The object of a bill of particulars is, "of course,
to narrow the evidence to the issues framed".
Curtis v. Phelps, 209 Fed. 261.

"The very function of a bill of particulars is
to apprise the moving party of the ultimate

facts UPON WHICH THE OTHER PARTY PROPOSES

to rely, without furnishing the mode of proof. ' '
O-So-Ezy Mop Co. v. Chemical Co., 230 Fed.
469, 470.

Plaintiff is limited in his demand and restricted
in his proof to the subject-matters specified in his
bill of particulars.

King v. Rhodes, 47 App. D. C. 316 ;

Decker v. Lightfoot, 44 App. D. C. 45;

Brown v. Calvert, 34 Kentucky (4 Dana) 219.

"The defendant is only called upon to meet
the allegations set out in the bill of particulars,
and presumptively he prepares to meet the

items of the bill of particulars and xot others
that may be proved against him."

Armour v. Blamenthal, 9 La. App. 707; 72

S. E. 168.

"The effect of furnishing the bill is to limit
the evidence which the plaintiff may offer in
support of his claim.' '

Chamberlain v. Loeiventhal, 138 Cal. 47.

A bill of particulars may have the effect of a
pleading in so far as it restricts the proof.

Cicotte v. Wayne Co., 44 Mich. 173; 6 N. W.
236.

"A bill of particulars is restrictive of the

RIGHT OF RECOVERY STATED IN A DECLARATION, and

it is error to admit proof of a cause of action

Or DAMAGES NOT THEREIN SPECIFIED."

Colwell v. Brown, 103 111. App. 22.

3. The amount of the judgment recoverable by plaintiff was
limited to $58,532.72.

"The bill of particulars limits the proof
which plaintiff is entitled to offer and confines
it to the subject matter of the items set forth
therein, and thus may be said to work a limi-
tation UPON OR AFFECT THE AMOUNT OF THE
JUDGMENT TO WHICH THE PLAINTIFF MAY BE
ENTITLED."

Frost v. Internat. Rubber Co., 37 R. I. 476;
93 A. 641.

A bill of particulars furnished by the plaintiff
to the defendant of the account sued on is to be

regarded as an amplification of the complaint, and

FOB THE TURPOSE OF DETERMINING THE PLAINTIFF'S

right of recovery, or the advisability of evidence
in support of the claim, is to be considered as in-
corporated into the complaint as originally filed.
Millet r. Bradbury, 109 Cal. 170.

Items not included in the bill of particulars can-
not be proved.

Ellis v. Crawford, 39 Cal. 523, 528.

The items of the bill of particulars, in the instant
case, aggregate $58,532.72. No item not covered by
this sum could be proved, nor could any sum not
covered by this sum be recovered.

4. The directed verdict for $70,582.72 should be reversed.
In Palmer v. Reynolds, 3 Cal. 396, it was held
that a judgment on a verdict for damages greater
than the demand in the declaration must be re-
versed, and the cause remanded.

As the effect of the bill of particulars is to in-
corporate the items into the complaint and to limit
the complaint, the judgment in the instant case is
greater than the demand in the declaration and
should be reversed.

Where the largest amount that could be allowed
under the pleadings and evidence is materially less
than that found by the judge, the judgment will be
reversed.

Western Gontr. Ass'n v. Rettiger, 9 Kan. A.
885; 61 P. 313.

In an action on several notes, a note for which
judgment was entered was not included in the bill,
nor specifically mentioned in the list appended
thereto. It was held that a judgment including the
amount of this note must be reversed, as being in
excess of the amount claimed in the pleadings.

Hart v. Chemical National Bank, 27 So. 926
(Miss.)

In Houston Ry. Co. v. Shutts, 90 S. W. 506
(Tex.) it was held that a verdict in excess of the
amount named in the pleadings constitutes revers-
ible error.

In Morrisett v. Wood, 128 Ala. 505; 30 So. 630,
the trial court had charged the jury that they were
not confined to proof of the items shown by a bill
of particulars furnished by plaintiff to defendant
before the trial. Held: Reversible error.

The court said:

"The office of a bill of particulars under the
statute is to amplify the pleadings, and to
prevent surprise of the defendant by furnish-
ing him with a statement of matters against
which he is called to defend. The bill, when
furnished, limits the generality of the pleading,
and its effect is, and should be, to limit the
proof to the particulars stated therein. . . ."

"The plaintiff will not be permitted to re-
cover under the common count or any cause of
action not included in the bill of particulars
filed with the declaration, and where he files a
bill of particulars, he will not be allotved in
the proof to go beyond them. . . /'

"The proofs should have been limited to the
bill of particulars as to the services rendered,
and the value of the particular services when
shown. The court therefore erred in the ad-
mission of evidence, in not limiting the proof
to the plaintiff's bill of particulars."

These authorities show conclusively that plaintiff,
under his pleadings, was precluded from showing
that he had any right to recover more than $58,-
532.72 ; that the directed verdict for $70,582.72 was
excessive, and that the judgment entered thereupon
should be reversed.

SECOND: EVEN ON THE ASSUMPTION THAT THE CONSTRUC-
TION OF THE CONTRACT, AS ADOPTED BY THE COURT,
IS CORRECT, THE "REGULUS", "ROMULUS", "GOVERNOR
FORBES" AND "SINALOA" SERVICES, ARE NOT MATTERS
OF LAW, BUT MATTERS FOR THE DETERMINATION OF A
JURY.

None of these services are within the express
duties enumerated in the agreement, under which
defendant was

(1) to act as general agent with authority to
appoint sub-agents, when required, for se-
curing cargo northbound and southbound;

(2) to fix charters when sufficient inducements
offer ;

(3) to make all necessary arrangements for
docking and clearing of the steamer at the
respective ports of call;

(4) to make contracts, at the lowest competitive
rates, for tallying- and stevedoring (by him-
self or sub-agents).

The conclusion that defendant was to build, and
repair steamers under this agreement can be justi-
fied only by striking out all the sixty-one words
following after the words " general agent", leav-
ing the mutilated contract in the form:

"For the steamship line as aforementioned
Mr. Smith is to act as general agent."

Assuming, for the sake of the argument, that
this mutilation of the contract is legally possible,
the question remaining to be settled would be:

What are the duties of a general agent for a
steamship line"? We respectfully submit that this
question is not answerable by any rule of law;
that the duties of the general agent of one steam-
ship line are different from those of a general
agent of a steamship line differently situated; that
the implied duties of the general agent of any par-
ticular steamship line depend upon all the circum-
stances surrounding that line, including customs
and usages; and that reasonable men might well
differ in finding, what duties are within, and what
duties without, the customary duties of a general
agent of a steamship line.

In other words, the question, what services were
to be performed by defendant as the general agent
of the steamship line (in the absence of specific
agreement) within this agreed compensation, as

such, is a question for the determination of a jury.
That the matters in issue with reference to defend-
ant's services in contracting for, constructing, pur-
chasing and salving ships were matters for deter-
mination by a jury, is shown by the decision of
the Supreme Court of California in the case of:

Brown v. Crown Gold Milling Co., 150 Cal. 389,
in which the Supreme Court used the following lan-
guage :

"In the next instruction complained of the
Court told the jury, in effect, that if they be-
lieved from the evidence that the plaintiff was
employed by defendant for the sole purpose of
exploiting a certain specific machine — that is,
explaining it and its mode of operation, and
the results produced by it, to persons inquir-
ing concerning it, and meeting arguments and
objections made against it — and also find from
the evidence that these services were to be ren-
dered at a specified sum per week, which was
paid, still if they found that during the term
of his employment plaintiff, at the request of
defendant, rendered certain services outside
the sphere of his employment, he was entitled
to recover a reasonable compensation for such
services, although there was no express agree-
ment to pay therefor.

No exception can be taken to the instruction
as embodying a correct principle of law.

It is claimed, however, by appellant, that it
had no application to the facts in the case at bar,
it being insisted that the extra services which
plaintiff claims to have performed were all in
connection with the operation and success of
the machine relative to which he was employed.
But whether these services which were claimed
to have been extra were so, or were in the line

of plaintiff's employment, were mailers for de-
termination by a jury, and their verdict must
be deemed conclusive on the subject."

In Pittsburgh Railroad Company v. Henderson,
36 N. E. 376 (Ind. 1894) the plaintiff was employed
by the defendant as general ticket and freight agent
at a railroad station. He sued for extra compensa-
tion for carrying mail for the defendant between the
post office and the railroad station. The defendant
contended, that, as to his right to extra compensa-
tion, the intent of the parties must be gathered
from the contract itself, and that, as a matter of
law, his employment covered his compensation for
the service of carrying the mail.

The court, in its opinion, gave full recognition
to the rule set out in Wood, Master and Servant:

"One employed at a regular salary to per-
form certain duties or labor is not entitled to
additional compensation on account of addi-
tional or increased labor in the same line of
employment, in the absence of an express prom-
ise to pay for such additional labor;"

but the court said:

"We are unable to conceive how it can be
held as a matter of law that the employment
as ticket and freight agent includes the duty
of carrying the mail between the station and the
post office.

If carrying the mail from the depot to the
post office was not a part of the service required
by appellee in connection with his employment
as ticket and freight agent, then he may re-
cover."

In Reiser r. Staufer, 41 N. W. 706 (Wis. 1889),
the plaintiff was employed, under a written contract,
to take entire charge of and to keep in order, all
engines, boilers, pumps and all other machinery in
defendant's saw mill, for a certain sum per year.
During the year he superintended the construction
of a well, pump and wTater works for the protection
of the lumber yard, adjoining the saw mill, against
fire.

The court held :

(1) This work was not in terms included in
the contract.

(2) The jury was justified, on conflicting evi-
dence, in finding that there was an implied contract
to pay for plaintiff's work and materials at their
reasonable price.

In Leach v. Railroad Company, 86 Mo. 27; 56
Am. Rep. 408, an agent to settle claims against the
railroad had a contract for services for a fixed
compensation. During said employment he made
claims against the railroad for services as a notary.

The court held :

"Whether these notarial services were dis-
tinct from and independent of, and not em-
braced in the plaintiff's contract of service, was
a question of fact, to be determined, under
proper instructions, from a consideration of all
competent evidence that might be offered there-
on by the parties."

In Standard Plunger Elevator Co. v. Bruwley,
149 Fed. 184, the Circuit Court of Appeals for the
Third Circuit held that:

"Where in an action for agent's services in
the sale of certain machinery, plaintiffs claim
for additional services rendered to defendant
in the performance of certain contracts outside
their general oral contract of agency, whether
such extra services were incident to such con-
tract, or whether they were independent there-
of, was for a jury."

In the instant case, the agreement was in writing
and specified the duties to be performed by defend-
ant, all of which duties refer to the operation of
steamers already built and exclude, impliedly, the
duty to furnish or build the new steamers. The
specifically enumerated duties of defendant, refer-
ring to the securing of cargoes for the steamers
of the line and the doing of acts related to such
cargoes, are sufficient, in our opinion, to have en-
titled defendant to an instruction to the jury that,
as a matter of law, defendant had no duty to pur-
chase or construct new steamers for the line with-
out compensation; but at this point we contend
that, after striking the definition of defendant's
duties from the agreement, and assuming the con-
tract to impose upon defendant all the duties im-
plied in a general agent appointed for the opera-
tion of the steamship line, still the question, whether
the services of purchasing and building new steam-
ers were incident to such a general contract of
agency or not, was primarily a question for the
jury.

What is usual and necessary for an agent to do
iu connection with the business in question is a
question for the jury.

Hartford & N. Y. Transp. Go. v. Plymer, 120
Fed. 624 (C. C. A., 2nd Circ).

The mere fact that one is found to be a general
agent justifies neither court nor jury in guessing
that given acts are within the scope of his authority
or duty.

Gore v. Canada Life Ass. Co., 119 Mich. 136.

THIRD: THE CONSTRUCTION OF THE AGREEMENT IN CONNEC-
TION WITH OUTSIDE SERVICES: DEFENDANT IS ENTITLED
TO REASONABLE COMPENSATION THEREFOR.

A. Analysis of the scope of defendant's duties.

1. The agreement is with regard to A/S Baja
California.

2. The Baja California was a steamship line to
operate between Mexican and Central American
ports, and the West Coast of the United States as
well as British Columbia.

3. For this steamship line defendant was to
perform services as follows:

(a) "act as general agent with authority
to appoint subagents, when required, for secur-
ing cargo northbound and southbound".

(b) to "fix charters when sufficient induce-
ments offer".

(d) "make contracts, at the lowest com-
petitive rates, for tallying and stevedoring".

"I have nothing to do with the operation of
the vessels, their outfitting, or their tackle,
furniture or repairs, or with the appointment
of their masters, or the employment of their
crews, or anything to do with the furnishing
of provisions and stores, or with the prepara-
tion of proper certificates or surveys, or their
insurance or management." (Testimony of De-
fendant, Record, p. 125.)

B. Principles of construction:

"The terms ' general agent' and * special
agent' are relative. An agent may have power
to act for his principal in all matters. He is
then strictly a ' general agent'. He may have
power to act for him in particular matters. He
is then a 'special agent'. But within the scope
of such particular matters his powers may be
general, and with reference thereto he is a
'general agent'."

Springfield Eng. & Thresher Co. v. Kennedy,
34 N. E. 856, 859 (Ind.).

C. Application to the instant case:

First: Defendant was not strictly a "general
agent" for the steamship line. He had power
to act for the steamship line, as a general agent,
and the correlative duties of performing serv-

dy in relation to the securing of
2 a the >" 3, northbound and

1. with the understanding that he, or
the - Events, v ntracts, at the

j( competitive r tallying and steve-

doring the - s. Within the -

dar matters his powers were general,
and with referenc these particular ma*

only he was a "general agent". These matl

rred to cargoes and contracts conni
with carg s. The - rvic - which he was to
Eorm for the agr< tmpensation were all

connected with the making tra rts relative

to the securing, tallying- and stevedoring
earev.es. All thes - rvices presup - the
existence of steamers ready I > I for the

carrying _ - and were disconnected

i the securing and operating of these steam-
The business of providing the -hip-, of
manning and operating them was the business
Laintiff t«:» be performed by himself or other
agents, f. i. the mast* - the steal

The additional special services to be per-
lefendant, viz.. "fixing charl
when sufficient inducements offer" and "mak-
ing all n< y arrangements for docking
and clearing of the steamers at the respective
Jl" — in so far as they wa "ices
connected with the steamers of the line, also
■ the providi] ; the steamers by
the plaintiff and their operation by other

agents and are so clearly specific that they ex-
clude any duty, on the part of defendant, of
performing the service of purchasing, con-
structing or salving steamers for the plaintiff.
The foregoing are all the services which de-
fendant was, by the agreement, to render for
the agreed compensation. It follows that all
other services, and in particular services ren-
dered in procuring and maintaining the ships
which were to carry the cargoes secured by de-
fendant, were extra services.

Second: All services performed by defendant,
which are not conditioned upon the previous
existence of steamers ready for operation and
earning freight, are not within the scope of
defendant's duties under the contract, but are
outside services for which he is entitled to com-
pensation on a quantum meruit basis.

Third: Services in connection with the acquiring,
building, managing, salving and repairing of
any ships were not transactions within the
scope of the duties contemplated by the agree-
ment.

Fourth: In particular the services connected with
the building of the steamers "Regulus" and
" Romulus" were not services covered by the
agreement, for the reasons that:
(a) these services were not "with regard to
A/S Baja California". The "Regulus"
was never used as a steamer of the Baja

California Line, running to "Mexican and
Central American ports". In his "Keport
for the Year 1917, to the stockholders,
plaintiff, the managing owner, says:

"The ship, which was named the "Reg-
ulus", immediately commenced loading
general merchandise in San Francisco,
bound for South American ports, as far as
Valparaiso. It brought back a full cargo
of nitrate, and has since been running reg-
ularly between Puget Sound, San Fran-
cisco, and South America."

(b) these services were not within the express
or implied duties of defendant under the
agreement, but were outside services to be
reasonably compensated for.

Fifth: The services performed in connection with
the purchase of the "Governor Forbes" were
not within the express or implied duties of de-
fendant under the agreement, but were outside
services to be reasonably compensated for.

Sixth: The services performed in connection with
the salving and repairing the "Sinaloa" were
not within the express or implied duties of
defendant under the agreement, but were out-
side services to be reasonably compensated for.

D. The construction adopted by the trial court strikes out of
the agreement the specification of defendant's duties:

Only by striking 61 words out of the agreement
does it become even plausible to make out of de-
fendant a kind of general manager of the line, au-

thorized and obligated to build and purchase new
steamers, and to salve steamers on the rocks. These
61 words are the words following directly after the
words "as general agent" in the second paragraph
of the agreement,

To produce this result it is necessary, not only to
eliminate the 61 words mentioned, but also to mu-
tilate the sentence in which the words "as general
agent" occur by changing it from the form used in
the agreement, viz. :

"For the steamship line as aforementioned
Mr. Smith is to act as general agent with au-
thority to appoint subagents, when required,
for securing cargo northbound and south-
bound"

to the following form:

"For the steamship line as aforementioned
Mr. Smith is to act as general agent."

Only by this process of amputation could defend-
ant be converted from a general freight agent with
limited powers and no control over the steamers
into a general manager of the line with the power
and duty to add to the steamers. No argument is
required to show that the court was not justified in
making a new contract for the parties by eliminat-
ing these words and disregarding their plain mean-
ing.

E. The practical construction placed upon the agreement
by the plaintiff himself confirms the contention that de-
fendant was to receive extra compensation for the services :

1. "Romulus": Plaintiff recognized defendant's
right to the commission of $10,000 for services ren-
dered in the construction of the "Romulus" by mak-
ing this sum an item of the price charged to the
United States when the steamer was commandeered.
It makes no difference, whether plaintiff has already
received the $10,000 or is to receive them in the
future; for the fact remains that, by making the
charge, he recognized its propriety and lawful-
ness (Record, p. 93; Appendix, p. 28). In the
event that he has already received this sum
from the United States, the effect of the pres-
ent judgment would be the unjust consequence that
he would receive double payment, whereas defend-
ant, who performed the service for which plaintiff
charged, would receive nothing. Plaintiff has im-
pliedly admitted that defendant's charge is just
and should be estopped from now claiming that
defendant has no right to a payment which he,
plaintiff himself, claims the right to collect from
the United States.

2. "Regulus": Plaintiff recognized defendant's
right to the commission of $6000 for the services
rendered in the construction of the "Regulus" by
including this item in his report for the year 1917,
to Pacific, Ltd., the corporation which owned this
steamer. Having allowed this charge against the
stockholders, plaintiff should now be estopped from

claiming that defendant had no right to make the
charge which he, plaintiff, recognized as a proper
charge against the stockholders (Record, pp. 79-81;
Appendix, p. 10).

Furthermore: In a letter dated August 29, 1917,
plaintiff wrote to defendant (referring to the ac-
count of June 1, 1917, containing the item: " Re-
numeration a/c Building S. S. Regulus, $6000").
"I have gone through your accounts enclosed in
your letter of June 1st, and find same in order.' '
(Record, pp. 71-72.)

F. Defendant was entitled to reasonable compensation for
the additional services.

In U. S. Mortgage Co. v. Henderson, 111 Ind. 24;
12 N. E. 88, an attorney was employed as agent
to negotiate and collect loans. Among others, he
performed services in foreclosing mortgages and
collecting moneys by legal proceedings; looking
after repairs and caring for properties bought in
at foreclosure proceedings; superintending repairs
and taking general supervision of properties.

It was held:

1. That these were " services quite different from
those comprised by the contract of agency".

2. That the principal was liable to pay a just and
fair compensation.

The case of Standard Plunger Elevator Co. v.
Brumley, supra, recognizes the principle that the
additional services rendered by the agent may be

so independent of the services originally contracted
for as to entitle him to extra compensation on
a quantum meruit basis.

In Ridley r. Sexton, 18 Grant (U. C.) 580, the
principal, engaged in the lumber business, engaged
an agent and agreed to pay him a specified com-
mission on all timber manufactured by the agent
for the principal, which rate "included purchas-
ing, superintending the making, and attending to
the shipping of the same". The agent bought a
quantity of timber for his principal, which was
not manufactured under the superintendence of the
agent.

It was held that he was entitled to a reasonable
compensation for this service. The court said:

"Notwithstanding he may be general agent
for the subject matter covered by his contract,
if he performs services for his principal, just
exactly as he would perform the service for
some one else, of value, and there arises under
the facts an implication that it was to be com-
pensated, there is not any reason under the
law, why he should not receive that compensa-

tion,

y >

In the instant case defendant was general agent
for securing cargo only. Plaintiff was the general
manager. The matter of the purchasing, con-
structing, repairing, and salving of the steamers
was his business. The masters of the vessels were
agents for matters connected with the navigation
of the steamers.

The services referring to the "Regulus", "Romu-
lus", "Governor Forbes" and "SinaJoa", were not,

in their nature, of the same character as the services
incident to the authority and duty of defendant
under the contract.

There was, therefore, an implied contract to pay
to defendant, in addition to the commission on
freight, the reasonable value of the additional serv-
ices rendered by him.

G. Under its own construction of the contract the court erred
in excluding evidence of a legal custom entitling de-
fendant, as general agent of the line, to reasonable com-
pensation, for the "Romulus", "Regulus", "Governor
Forbes" and "Sinaloa" services.

Defendant offered to prove a general and uni-
form custom to compensate general agents of steam-
ship lines for services rendered in connection with
vessels (such as the "Regulus", "Romulus" and
"Governor Forbes" services), and in particular
in connection with salvage services ("Sinaloa"),
but the court sustained plaintiff's objections to all
of defendant's questions bearing upon such cus-
tom and excluded all evidence thereof (Assi emrnpnts
of Error Nos. 6, 7, 8, 9, 10, 11, i2f Appendix 35-36)

We deem it to be a settled principle of law that a
legal custom to compensate an agent for perform-
ing extra services under a contract warrants the
recovery of extra compensation.

Meohem Agency, Sec. 1522;
Z7. S. v. Fillebrown, 1 Pet. 28.

FOURTH j THE CONSTRUCTION OF THE AGREEMENT RELA-
TIVE TO COMMISSIONS ON FREIGHTS EARNED BY THE
LINE OUT OF CARGO SECURED BY DEFENDANT, BUT COL-
LECTED BY THE LINE AFTER EXPIRATION OF DEFEND-
VMS TERM OF AGENCY:
DEFENDANT IS ENTITLED TO SUCH COMMISSIONS.

The following items of the bill of particulars
belong to this category:

1. Commission on the Dupont cle Ne-
mours nitrate contract $25,517.80

2. Commission on inward freight of

* ' Governor Forbes ' ' 2,049.65

3. Commission on estimated freight

earned by other steamers 5,000.00

$32,567.45.
In all these cases the cargoes were secured by
defendant before October 1, 1917, the date of ter-
mination of his agency. The freight money on the
cargo thus secured during the term of defendant's
agency was, however, not paid to the line until
after the expiration of the term.

Defendant contends that he is entitled to the 5%
commission on this freight under the contract.

In this connection it must be noted that the
nitrate contract with Dupont de Nemours Company
was originally made by defendant on his own be-
half, and that defendant notified plaintiff that if he
took it over, it would be subject to defendant's
5% commission. Plaintiff assumed the contract,
carried the nitrate in his vessels, and collected an

amount of freight-money entitling defendant to
$25,517.80 as a 5% commission on said amount.

The court denied all the instructions requested
by defendant to the effect that defendant had a
right to these commissions and, by directing a
verdict in favor of plaintiff, ruled that defendant
had no right to any of these commissions (Assign-
ment of Errors Nos. 33, 34, 35, 36, 43, 44; Appendix,
pp. 44-48).

The principal service to be performed by de-
fendant in the course of his agency was the se-
curing of cargoes for the steamers of the line. A
subordinate and contingent service was the fixing
of charters for the steamers (if advisable).

The compensation allowed in the agreement for
these services was, correspondingly :

(I) "Commission of 5% on all freight earned"
out of cargoes secured;

(II) " Commission of 2%% on the freight earned"
out of charters secured.

This commission was "allowed" when the serv-
ices were rendered.

When were the services rendered by defendant
and his commission "allowed"'? Obviously when,
in the case of contracts of affreightment, the cargo
was secured by the making of the contracts and
when, in the case of charters, the charter was fixed.
After that other agents of the line attended to the

further business connected with the steamers and
cargoes down to the point when the freight money
was paid; but defendant's business was finished,
and his commission "allowed", when the contract
of affreightment was wade by him. Had the con-
tract been that the commission was allowed on all
"freight received", or on all "freight collected", or
on all "freight paid", it would indicate an inten-
tion of the parties to allow to the agent a commis-
sion only on freight actually collected or received
during the term of his agency; but the language
used in the agreement: that the commission was
allowed on all "freight earned" indicates an inten-
tion to make the commission independent of the
time of the collection or payment of the freight.

"To 'earn9 means 'to gain as a just return or
recompense by service, labor or exertion'."

Dayton v. Etvart, 72 Pac. 40.

This is independent of the time of receipt or col-
lection of the recompense ; the recompense is earned
w7hen the person performing the labor has gained
the right to the recompense.

"Freight earned", in the agreement, means,
therefore : Freight gained by the steamship line, or
which the line has a right to receive, as the result
of defendant's service. On all such freight a com-
mission of five per cent is expressly allowed. When-
ever paid to the steamship company, this freight is
earned by it, as the result of the service, labor and
exertion of defendant.

It follows that defendant must be allowed the
agreed commission on all freight which the steam-
ship line acquired a right to collect in consequence
of defendant's services.

This construction is confirmed by allowing the
commission not only on "freight earned", but "on
all freight earned", excluding the idea of any dis-
tinction between freight received at one time or
another.

In S. H. Greene & Sons v. Freurd, 150 Fed. 721
(C. C. A., 2nd Circ), plaintiff made a contract with
defendant to act as its agent in procuring orders
for the bleaching, printing and dyeing of cotton
goods, in which business defendant was engaged.
The contract provided that the plaintiff should re-
ceive a commission, to be paid on all the work se-
cured by him. The Circuit Court of Appeals for
the Second Circuit held that on the termination of
plaintiff's agency he was entitled to recover from
defendant commissions, not only on the work done
prior to the termination of the agency, but also on
all work called for by contracts secured by the
agent, by the acceptance of his offers by customers.

In the instant case, as in the case cited, the com-
mission agreed upon was compensation for work
secured by the agent, viz, for the work of securing
cargoes for the steamers of Baja California line.
The business of the agent was not the earning of
the freight, but the procuring of the contracts. When
he had secured the cargoes by procuring the con-

tracts of affreighment, he was to be allowed the com-
mission, as a reward of his service.

The quantum of the commission, the amount of
his compensation, was to be figured out on the basis
of a percentage "on all freight earned". The ques-
tion was, therefore, simply: What freight was
earned out of the cargoes secured by defendants
And the computation of the amount of the commis-
sion was made by calculating 5% "on all freight
earned'' out of cargoes so secured.

In Singer Sewing Machine Co. v. Brewer, 78
Ark. 202, a sewing machine agent was to receive a
commission on sales ; there was a proviso that
"all his claims therefor shall cease immediately
upon the termination of this agreement 9\ Held, the
proviso does not apply to the 15% commissions
earned, but not yet payable, when the contract of
agency terminated.

This principle would hold even if the plaintiff
had seen fit to have the shippers execute new writ-
ten contracts for the transportation of the cargoes.
Merriman r. McCormick Harv. Marl). Co.,
71 N. W. 1050 (Wis.).

The construction here contended for accords with
the general proposition that the agent is entitled to
his compensation when he has fully completed his
undertaking according to its terms. The inquiry
in every instance must be: 1. What did the agent
undertake to do ? 2. Has he done it ?
Mechem, Agency, Sec. 1532.

In the instant ease defendant undertook to secure
cargoes for the steamers of the "Baja California"
line, and he did secure them. When he had done
this, he was to be allowed, and was entitled to, his
commission. To compute the amount of this com-
mission, it was necessary to determine the total
amount of all freight earned on the cargoes secured
by defendant and to allow to defendant 5% of this
total amount.

IN CONCLUSION.

It is respectfully submitted that the court erred
in denying to defendant all compensation for serv-
ices rendered in connection with the construction of
the steamers "Regulus" and "Romulus", and the
purchase of the steamer "Governor Forbes", and
the salving and repairing of the steamer "Sinaloa",
and in denying to defendant all compensation for
securing the nitrate cargoes of Dupont de Nemours
Company, and the inward cargo of the "Governor
Forbes", and the cargoes on which freight was paid
after October 1, 1917.

On the grounds stated the judgment of the Dis-
trict Court should be reversed.

Dated, San Francisco,
May 16, 1921.

•/ 7

Respectfully submitted,
Andros & Hengstler,

GOODFELLOW, EELLS, MOORE & ORRICK,

Attorneys for Plaintiff in Error.

(APPENDIX FOLLOWS.)

Appendix.

Index to Appendix.

Page

I. NO VERDICT FOR A GREATER SUM THAN THE SUM
TOTAL OF THE ITEMS OF THE BILL OF PARTICULARS,

viz., $58,532.75, is justified under the pleadings 1

(a) Quotations from and references to record rela-
tive to assignments of error 1

(b) Defendant contends that the court erred in
directing a verdict in excess of plaintiff's claim
by the sum of $12,050 and in entering judg-
ment against defendant on said verdict 2

in Bill of Particulars 2

II. "Regulus": the charge of $6000 for contract-
ing AND SUPERINTENDING HER CONSTRUCTION 4

(a) Quotations from and references to the record 4

(b) In his annual report made as president of the
corporation which owned the "Regulus", the
plaintiff admitted the correctness of this $6000
charge by, the defendant 5

(c) The agency contract between the plaintiff and
the defendant was in respect to certain speci-
fied duties to be performed by the defendant
in respect to appointing sub-agents and pro-
curing freight for vessels of the Baja Cali-
fornia Company. The "Regulus" was never
owned by that company, and it is immaterial
that plaintiff intended to put her in the same
business as the "Baja California" vessels 11

(d) The defendant should have been permitted to
show that plaintiff allowed him to purchase
stock only to the extent of $3000 out of the
total of $450,000 in the Pacific Limited 17

(e) Assignments of Error as to "Regulus" item. . 22

ii Index to Appendix

Page

III. THE commission for CONTRACTING and supervising

the "Romulus"— $10,000 25

(a) Quotations from, and references to, the record
relating to assignments of error 25

(b) Assignments of Error as to "Romulus" item.. 25

IV. Commission purchase "Governor Forbes" — $6000 30

(a) References to record relating to assignments

of error 30

(b) Assignment of errors as to commission on pur-
chase of "Governor Forbes" 31

V. "Sinaloa" salvage account— $3165.27 32

(a) Quotations from and references to the record
relating to assignments of error 32

(b) Assignments of Error as to "Sinaloa" salvage
item 38

VI. Commission Dupont contract — $25,517.80 43

(a) References to record relating to assignments

of error 43

(b) Assignments of error as to commission on Du-
pont contract 44

VII. Balance estimated freight earnings — $5000.... 47

(a) Reference to record in connection with assign-
ments of error 47

(b) Assignments of error as to commission on
freight booked prior to October 1st 47

VIII. Commission on inward freight "Governor Forbes"

—$2049.65 48

(a) Reference to record in connection with assign-
ments of error 48

(b) Assignments of error as to commission on in-
ward freight "Governor Forbes" 48

Appendix
Containing Quotations from and References to the Pages

of the Record.

I. XO VERDICT FOR A GREATER SUM THAN THE SUM TOTAL
OF THE ITEMS OF THE BILL OF PARTICULARS, VIZ.,
$58,532.75, IS JUSTIFIED UNDER THE PLEADINGS.

(a) Quotations from and references to record relative to
assignments of error.

The items specified in the bill of particulars are :
Charge for Hull 154 ("Romulus'') $10,000.0
Commission Dupont Powder contract 25,517.80
Commission inward freight " Gover-
nor Forbes" 2,049.65
Commission purchase " Governor

Forbes" 6,800.00

"Sinaloa" salvage account 3,165.27

Balance estimated freight bookings 5,000.00
Charge for superintending construc-
tion of "Regulus" 6,000.00

Total $58,532.72

(Record, pp. 6 and 9.)

The above mentioned items are referred to in two
letters which are incorporated in the bill of partic-
ulars. The bill of particulars then states:

"That the items stated in said two letters,
plus $12,050, for the details of which we have
sent to Christiania * * * are the items
which constitute the bill of particulars * * *
upon which this complaint is based."

(Record, pp. 9-10.)

The complaint alleged that defend-
ant had collected for plaintiff's ac-
count $70,582.72

The bill of particulars specifies 58,532.72

Balance unspecified $12,050.00

The directed verdict was for the amount of
$70,582.72 (and interest), being $12,050 in excess of
aggregate claim specified in bill of particulars.

One of the letters quoted in the bill of particulars
also contained an item of $3119.12 on account of
overpayment of freight upon the Dupont contract,
but the correctness of this item was conceded near
the end of the bill (Record, p. 10).

(b) Defendant contends that the court erred in directing" a
verdict in excess of plaintiff's claim by the sum of $12,050
and in entering judgment against defendant on said ver-
dict.

Assignment of Error No. 23 :

"In sustaining plaintiff's objection to the follow-
ing question propounded by defendant to the wit-
ness, C. Henry Smith:

'Q. Now, as a matter of fact, Mr. Smith, so
far as you can tell at the present time what are
the disputed items, or the amount of them'?"

(Record, p. 237.)

Assignment of Error No. 24:

"In sustaining plaintiff's objection to the follow-
ing question propounded by the defendant to the
witness, C. Henry Smith:

'Q. I will ask you to state whether Mr. Lin-
vig, or any one else connected with the plaintiff
in this case, or anyody else, has ever stated to
you what the item of $12,050 has reference to
wdiich is mentioned in the bill of particulars
filed by the plaintiff in this case, and as to
which it is therein stated that they are sending
to Christiania for details' V

> (Record, pp. 215, 237.)

Assignment of Error No. 25:

"In sustaining plaintiff's objection to the offer

in evidence of the following cablegram relating to

stock in the corporation owning the "Regulus"

from the defendant to the plaintiff, dated January

11, 1916:

' Stock accepted; letter twenty-first Decem-
ber'."

(Record, pp. 216, 238.)

Assignment of Error No. 46 :

"In refusing to give instruction No. 16, requested
by the defendant, and reading :

' The court instructs the jury to find in favor
of the defendant as to the item of $12,050 re-
ferred to in plaintiff's bill of particulars, for
the details of which it is therein stated that
the plaintiff has sent to. Christiania'."

(Record, pp. 22, 246.)

II. "REGULUS": THE CHARGE OF $0000 FOK CONTRACTING
AND SUPERINTENDING HEB CONSTRUCTION.

(a) Quotations from and references to the record.

On December 23, 1915, defendant entered in-
to a contract with a San Francisco shipbuilding
firm for the construction of the "Regulus" at the
contract price of $450,000 (Record, p. 34). Although
authorized by plaintiff's cables to enter into this
contract (Record, pp. 28-29), defendant assumed the
responsibility of executing the contract in his own
name.

"I did this because my principal was a for-
eigner, and the United Engineering Company
wanted my name on the contract.' '

(Record, p. 33.)

That the services rendered by the defendant in
securing and entering into this contract for the
construction of the "Regulus" were of very great
value to the plaintiff, is a fact which cannot be de-
nied. The two vessels contracted for by the de-
fendant as the agent of the plaintiff were the
"Regulus" and the "Romulus". The "Regulus"
contract was executed on December 23, 1915, and
the "Romulus" contract on September 15, 1916
(Record, pp. 34, 82). They were sister ships of the
same tonnage and specifications (Record, p. 91).
The contract price of the "Regulus" was $450,000,
while the contract price of the "Romulus" was
$775,000.

"The difference in these contract prices was
due to the rising value of materials during the
interval."

(Record, p. 91.)

That the defendant devoted a great deal of time
to the general supervision of the construction of
these vessels, is also undisputed. Both of them
were built on the Oakland Estuary, and the de-
fendant's offices were in San Francisco.

"All of the time that these vessels were
building I had to go over there and be in con-
ferences with the inspectors and to watch the
specifications so it took a great deal of my
time."

(Record, pp. 81-82.)

(b) In his annual report made as president of the corporation
which owned the "Regulus", the plaintiff admitted the
correctness of this $6000 charge by the defendant.

To own and operate the " Regulus" the plaintiff
formed a separate corporation, which is known as
"The Pacific Limited". The "Baja California"
and the "Sinaloa", the two vessels built at Sunder-
land, England, were owned and operated by the
"Baja California" Company.

The defendant testified:

"The ' Regulus' made her first outward voy-
age in April and all the vouchers were in and
the account closed by June 1st, 1917. In my
statement of account with Mr. Lindvig dated
June 1st, 1917, I included the following item
' Remuneration account building steamship
"Regulus" $6000'."

(Record, pp. 66-67.)

On July 18, 1917, the plaintiff wrote the defend-
ant acknowledging receipt of the letter and account
of June 1st and in respect to the "Regulus" item
his letter reads:

"Your statement of first June. As far as I
can see hitherto, there is no voucher concerning
the item ' Remuneration account "Regulus"
$6000'. Please explain same."

(Record, p. 71.)

In reading this correspondence the delays in the
mail existing at that time should be kept in mind.
The defendant testified that the above mentioned
letter dated July 18, 1917, was not received by him
until October 15, 1917 (Record, p. 70).

On August 28, 1917, the plaintiff wrote the de-
fendant a letter reading in part as follows :

"I have now gone through your accounts en-
closed in your letter of June 1st, and find same
in order with the exception of following items
in the general statement dated June 1st:
Rebalance from s/s 'Sinaloa' voyage

8 is transferred with the amount of $41,699.41
While the statement says 40,611.99

Which makes a difference in your fa-
vor of $1,087.42."

(Record, pp. 71-72.)

"As formerly told you, there was no
voucher regarding remuneration a/c building
SS 'Regulus' $6000."

(Record, p. 72.)

On November 8, 1917, the defendant wrote the
plaintiff a letter reading in part:

"Statement First of June.
"Regarding this voucher, we have sent you
one as far as I remember and it is for attend-
ing to contract, making payments and keeping
books for this vessel and also for protecting
the contract."

(Record, pp. 73-74.)

The defendant testified:

"I do not remember whether I sent a
voucher for the $6000.00 as part of the re-
muneration building of the steamship 'Regulus'
with my statement of June 1st, but I sent a
voucher afterwards. ' '

(Record, p. 73.)

The plaintiff had organized the Pacific Company
to own the "Regulus", and as the president and
general manager of the company, he doubtless de-
sired a voucher or receipt signed by the defendant
to represent the $6000 which the defendant then
sent him.

On April 11, 1918, plaintiff sent out a written
report to the stockholders (Record, pp. 77-78), cov-
ering the operation of the "Regulus" from the date
of its completion to the end of 1917, and notifying
them that:

"The annual stockholders' meeting will take
place at my office, Thursday, April 25th, at 1
P. M."

(Record, p. 80.)

This reporl recognizes defendant's commission as
a part of her construction cost, and reads:

"Report for the Year 1917— (4/1— 12/31).

"The company 'Pacific' Limit eel, was estab-
lished at a meeting of November 23, 1916, with
a capital of Kr. 950,000.00 paid in full, in or-
der to purchase the contract for a 6000 ton
steamer built at the Union Iron Works, San
Francisco, at a price of $450,000.00, for de-
livery in December, 1916.

"As the ship was contracted for a single
decker, an additional sum had to be paid for
furnishing a tween deck. Wireless telegraph
as well as various other extras were also ar-
ranged for. The total cost of the ship was Kr.
1,856,329.41.

"To cover the amount a 5%% loan of Kr.
600,000.00 was obtained from the Sorske Skibs
Hypothenkbank for a mortgage on the ship.
The balance was covered by cash credit in An-
dresens Bank a/s.

"The delivery of the ship was somewhat de-
layed (partly on account of strikes), and it was
not taken over until April, 1917. The builders
paid $10,000.00 as a compensation for the late
delivery.

"The ship, which was named the 'Regulus',
immediately commenced loading general mer-
chandise in San Francisco, bound for South
American ports, as far as Valparaiso. It
brought back a full cargo of Nitrate, and has
since been running regularly between Puget
Sound, San Francisco and South America.

"The voyages have been made without any
serious accidents, and the ship has completed
21/o round trips during the three quarters of a
year it has been running.

"C. Henry Smith acted as Agent in San
Francisco until October 1, 1917, when the A. O.

Lindvig Company established their own office
in the City.

"The freight rates southbound increased con-
siderably during the year, especially the last
months: for instance, the freight amount for
southbound trip in September amounted to
$147,000.00 against $178,000.00 in December,
and there is at the present time apparently no
sign of a decrease in the rates.

"For the northbound voyages the ship has
been on a contract for $13.75 per ton on Ni-
trate to San Francisco, with a small additional
payment for discharging up north. The con-
tract will expire about May, 1918, and there-
after we can expect a raise on these rates also.
"A dispute has unfortunately arisen with
the former agent, C. Henry Smith, as Mr.
Smith withheld about $52,000.00 of the collected
freight, to cover various commission charges,
which wTe consider him absolutely not entitled
to. The dispute will probably be settled this
summer.

"As shown by the following statement, the
ship has earned a total freight of Kr. 2,033,-
983.36, with a net profit of Kr. 1,096,420.32.
After deducting interest charges, registration
fee, etc., the money at disposal amounts to Kr.
1,012,346.65, which will be disposed of as fol-
lows:

Written off on the ship Kr. 256,329.41

Reserved for boiler & survey

funds 100,000.00

Reserved for taxes for 1917 350,000.00

30% dividend to the sharehold-
ers 255,000.00

carried into new account 51,017.24

Kr. 1,012,346.65

"The 30% dividend was given on January
2nd, this year.

"Due to the low exchange on dollars, the
money has not been transferred to Norway, but
deposited in a San Francisco bank. At the
end of the year this deposit amounted to $284,-
812.8,5. At the same time we had debts in the
Andresens Bank A/S, amounting to Kr. 560,-
422.31. The mortgage has been reduced with
5%, viz, Kr. 30,000.

"The annual stockholders' meeting will take
place at my office Sjofartsbygningen, Thurs-
day, April 25, at 1 :00 P. M.

Kristiania, April 11, 1918.
A. O. Lindvig.

Cost of the S.S. Regulus'.

Contract price $450,000.00 Kr. 1,630,500.00

Putting in tween decks, various

extras and improvements

outside the contract Kr.

204,229.41 204,229.41

Commission for Contracting

the Ship, Charged by C.

Henry Smith $6000 21,600.00

1,856,329.41"

(Record, pp. 79-81.)

Apparently plaintiff was not then aware of the
fact that his local representatives had challenged
defendant's right to retain this commission of
$6000.00. Plaintiff's report to the "Pacific Lim-
ited" stockholders was dated April 11, 1918. The
complaint in this action was filed December 15,
1917. The complaint was verified by B. Lindvig,
the son of plaintiff, who had been in San Francisco
since the fall of 1916.

It is apparent from plaintiff's report to the
stockholders of the "Pacific Limited" that he him-
self concedes defendant's right to this commission,
and has already charged it against the construction
of the "Regulus".

The plaintiff presumably advanced the money
for the construction of this vessel, as the vessel was
contracted on December 23, 1915, and the "Pacific
Limited", according to the plaintiff's reports to its
stockholders, "was established at the meeting of
November 23, 1916". This report states "the total
cost of the ship was 1,856,329.41 Krs." Included
within the items comprising this 1,856,329.41 Krs.
is the defendant's charge of $6000.00. The effect
of the verdict directed against the defendant is,
that the plaintiff keeps this $6000.00 which he rep-
resented to the stockholders had been paid to the
defendant.

(c) The agency contract between the plaintiff and the de-
fendant was in respect to certain specified duties to be
performed by the defendant in respect to appointing
sub-agents and procuring freight for vessels of the Baja
California Company. The " Regulus" was never owned
by that company, and it is immaterial that plaintiff in-
tended to put her in the same business as the "Baja
California" vessels.

"Mr. A. O. Lindvig, of Christiania, and Mr.
C. Henry Smith of San Francisco have this
day made the following agreement with regard
to A/S Baja California, a steamship line, to
operate steamers between Mexican and Central
American Ports and the West Coast of the
United States as well as British Columbia.

"For the steamship line as aforementioned
Mi*. Smith is to act as general agenl with au-
thority to appoint subagents, when required,
for securing cargo northbound and south-
hound, fix charters when sufficienl inducements
offer, as well make all necessary arrangements,
for docking and clearing of the steamer at the
respective ports of call.

"It being also understood that the general
agent or subagents are to make contracts, at
the lowest competitive rates, for tallying and
stevedoring. On all freight earned a commis-
sion of five per cent is to be allowed Mr. Smith,
including any allowance or allowances made to
subagents — besides this remuneration an allow-
ance per steamer is to be made to cover inci-
dentals, stamps and other disbursements and
for travelling expenses, as required, subject to
special agreement.

"In the event any steamer or steamers of the
A/8 Baja California are fixed by Mr. Smith
for other voyages than as hereinbefore men-
tioned, or on time charter, a commission of 2%
per cent on the freight earned is allowed.

"This agreement is to remain in force for a
period of three years, provided the line re-
ferred to above is maintained so long.

"Christiania, 29th June, 1914.

(Sgd.) A. O. Lindvig,
(Sgd.) 0. Henry Smith."

("A/S" stands for corporation.)

(Record, p. 26.)

As is plainly evident from the terms of this
freight agency contract, the contracting for, and the
superintending of construction of vessels by the de-
fendant is not included within the compensation
or duties mentioned in the contract, even though
built for the "Baja Calif ornia" Company, or even

if intended to be put into service with the vessels
of the "Baja California" Company.

Respecting his duties under the agency contract,
the defendant testified:

"I have nothing to do with the operation of
the vessels, their outfitting, or their tackle, fur-
niture, or repairs, or with the appointment of
their masters, or the employment of their
crews, or anything to do with the furnishings
of provisions and stores, or with the preserva-
tion of proper certificates, or surveys, or their
insurance, or management."

(Record, p. 125.)

In point of fact, the "Regulus" was never owned
by the "Baja California" Company.

On December 10, 1915, eight days before the con-
struction contract was signed the plaintiff wrote the
defendant a letter, reading in part:

"I note you are willing to take interest for
$100,000 and that others are also inclined to
take some stock, but as I have not yet made
up my mind if the steamer is going to enter
the Baja California, I shall w7rite you later on
this subject.

(Record, p. 30.)

On December 21, 1915, two days before the con-
struction contract was signed the plaintiff wrote
the defendant a letter, in part reading:

"I have decided not to let this vessel go into
the 'Baja California' Company, but to form a
new company, which I have thought of naming
the Joint Stock Company, Pacific."

(Record, pp. 52-53.)

At the time of the execution of the agency agree-
ment the " Baja California" Company was "to oper-
ate steamers between Mexican and Central Ameri-
can ports and the west coast of the United States
as well as British Columbia" (Record, p. 26).

In his report for the year 1917 to the stockhold-
ers plaintiff states:

"The ship, which was named the 'Regulus',
immediately commenced loading general mer-
chandise in San Francisco, bound for South
American ports, as far as Valparaiso. It
brought back a full cargo of nitrate, and has
since been run regularly between Puget Sound,
San Francisco and South America."

(Record, p. 79.)

When the vessel was nearing completion, the
question arose as to whether or not the Shipping
Board would permit her ownership by a Norwegian
corporation. The plaintiff was very desirous that
the ownership of the vessel be transferred to the
ownership of the "Pacific Limited", which was a
Norwegian corporation, and wrote a letter to this
effect to the Norwegian Legation at Washington
(Record, p. 62).

On March 8, 1917, the defendant cabled the
United States Shipping Board as follows:

"United States Shipping Board,

Munsey Building, Washington, D. C.

In December, nineteen fifteen, a contract was

entered into between undersigned and United

Engineering Works for the construction and

sale of a steel steamer Regulus stop. Under-

If)

signed was acting solely as agent for A. O.
Lindvig of Norway, who furnished the money
for the purchase, the contract having been
made in his behalf and confirmed by him stop.
The ship is practically completed and is adver-
tised for sailing to South America on Thurs-
day next, all cargo having been booked and
much of it having arrived in San Francisco
ready for shipment stop. Norwegian Counsel
stands ready to give Norwegian temporary reg-
istry stop. Since ship owned by Norwegian
and neither enrolled, licensed or registered
American am advised by consul that Snipping
Act does not apply stop. However, in order
that no possible misunderstanding later, we
hereby explain transaction stop. Simply de-
sire to know that no objection by Board to
completion of contract by final payment to
builder by undersigned for Lindvig and de-
livery to Lindvig of formal bill of sale so that
vessel can get away stop. Any delay beyond
that time means loss of more than two thou-
sand dollars daily stop. May we ask for reply
at your earliest convenience.

C. Henry Smith, Inc."

(Record, p. 56.)

On March 29, 1917, the following telegrams were

exchanged between the defendant and the United

States Shipping Board :

" March 29, 1917.
" United States Shipping Board,

Munsey Building, Washington, D. C.
"In consideration of the United States Ship-
ping Board having waived any and all right to
purchase, under section nine of the United
States Shipping Act of September seven, nine-
teen sixteen, the steamer Regulus, now in the
port of San Francisco, California, and having

also granted and approved the sale and trans-
fer of said steamer to A. O. Lindvig of Chris-
tiania, Norway, said A. (). [indvig docs hereby
agree with said United States Shipping Board
that said steamer Regulus will make three con-
secutive round trip voyages from said San
Francisco or from other American port or ports
on the Pacific Coast of North America, to port
or ports on the west const of South America,
and that the first of said round trip voyages
will be commenced within twenty-one days from
date.

A. O. Lindvig,

By C. Henry Smith, Inc.,

Agent.' '
"We guarantee that the above agreement
will be carried out by the ' Regulus'.

C. Henry Smith, Inc."

"March 29, 1917.
San Francisco, Cal.
"C. Henry Smith, Inc.

"In consideration of owner of Regulus en-
tering into agreement offered in your telegram
of March twenty-eighth, Shipping Board
waives any right it may have to purchase Re-
gulus under provisions sections nine shipping
act; prepare agreement and forward same to
board. Board looks to your personal assur-
ance of its performance as much as to terms of
contract,

"Shipping Board."
(Record, pp. 62-63.)

It thus appears that not only did the defendant
assume a personal responsibility for $450,000.00 by
signing the contract for the construction of the ves-
sel as the principal, but in order to carry out the
plaintiff's wishes that she remain in private owner-
ship, the defendant gave his personal guarantee

that if the Government permitted the transfer to
the Norwegian corporation she would make at least
three voyages between the Pacific Coast ports of
North America and the West Coast of South
America, from where she was returning with ni-
trate cargoes consigned to the Dupont Company
(Record, p. 111).

(d) The defendant should have been permitted to show that
plaintiff allowed him to purchase stock only to the extent
of $3000 out of the total of $450,000 in the Pacific Limited.

While it may be true that it is largely immate-
rial whether the defendant was or was not per-
mitted to acquire any stock interest in the Pacific
Limited, yet it seems to us that as one of the cir-
cumstances bearing upon his right to compensation
for her construction, it was pertinent to show that
the plaintiff treated the defendant's request to sub-
scribe for $100,000 worth of stock wholly as a mat-
ter of favor, and finally allowed the entire sub-
scription by the defendant and Dupont officials only
to the extent of $54,000, with the result that the de-
fendant was only allowed to obtain stock to the
amount of $3000 for himself the balance of the
$54,000 going to the United Engineering people
(Record, p. 114).

On November 30, 1915, the defendant cabled the

plaintiff :

"Have option six thousand (6000) tonner
United Engineering Works here model and ar-
rangement like steamer Sverre and oil burner,
delivery within twelve months, four hundred

and fifty thousand dollars, tween deck and elec-
tric ligW fifteen thousand extra. I can guaran-
tee one hundred thousand dollars subscription
of stock this city, if wanted, and further sub-
scription South American builders have option
steel only few days so please telegraph quickly
if interested."

(Record, p. 27.)

On December 6, 1915, defendant cabled plaintiff:

"Six thousand tonner lowest price account
steel now advanced and mills busy two years
guaranteed speed nine knots. Will subscribe
hundred thousand dollars stock. Some of Du-
pont officials will also take shares. "

(Record, p. 28.)

On December 10, 1915, plaintiff wrote the de-
fendant :

"I note, you are willing to take interest for
$100,000 — and that others are also inclined to
take some stock, but as I have not yet made up
my mind if the steamer is going to enter the
'Baja California' Company, I shall write you
later on this subject/'

(Record, p. 30.)

On December 14, 1915, defendant wrote plaintiff:

"We are prepared to arrange for subscrip-
tion of stock in this steamer to the extent of
$100,000.00, as advised in the cables and we
should therefore like to know at an early date
the name of the company and how these sub-
scriptions should be made."

(Record, p. 33.)

1!)

On December 21, 1915, plaintiff wrote defendant:

14 1 havi decided not to let this vessel </<> into
the 'Ha.ia California' company, but to form a
new company, which I hove thought of naming
tin joint stock company 'Pacific'. I enclose
copy of subscription circular, from which you
will note that the joint capital is placed at
Kr. 850,000 — as a mortgage loan will be raised
for the rest of the purchase price. The value
of the shares will be Kr. 5000 each. Up to the
present has been subscribed Kr. 635,000. And
I have1 therefore for the present reserved for
you an amount of up to Kr. 200,000, and will
be obliged for your telegraphic reply upon re-
ceipt hereof, if you are considered included
herewith. ' '

(Record, p. 53.)

The 200,000 crowns which the plaintiff stated
that he had reserved for the defendant wras then
the equivalent of approximately $54,000 of our
money (Record, p. 54).

"Q. You have stated in your telegram to
him that vou would subscribe $100,000.

A. Yes.

Q. But he did not reserve but about $54,-
000.00 to you? A. Yes.

Q. Now^ on January 11, 1916, did you send
Mr. Lindvig a cablegram of which this is a
copy ?

Mr. Fraxtc. The same objection, immate-
rial: it has nothing to do with this transaction.

The Court. The objection is sustained, Mr.
Moore; it is wholly immaterial now.

"The court thereupon sustained said ob-
jection, to which ruling counsel for the de-
fendant duly excepted, and said exception is
specified and designated

Exception Number One.

"The cablegram of January 11, 1916, from
the defendant to the plaintiff, and which was
referred to in the question to which the ob-
jection was sustained, read:
'Statsraad Lindvig,

Kristiania (Norway).
1 Stock Accepted Letter Twenty-First
December Sinaloa Sailed Twenty-Four
Hundred Thirty Tons.

Smith'.

(Record, p. 54.)

"The defendant then offered the following
cablegrams received by him from the plaintiff:

' January 19, 1916.
6 If you don't wish to overtake full amount
two hundred thousand Kroner Pacific, I can
dispose of about one hundred thousand here
please telegraph'.

"At the same time the defendant offered a
cablegram by him to the plaintiff in reply to
the foregoing from plaintiff. This last men-
tioned cablegram read:

'January 19, 1916.
' Cannot give up any of two hundred thou-
sand Kroner stocks writing'.
"Counsel for the plaintiff thereupon ob-
jected to the introduction of the above men-
tioned telegram as being immaterial.

"The court sustained said objection, to which
ruling the counsel for the defendant duly ex-
cepted, and said exception is designated

Exception Number Two."

(Record, p. 55.)

That the defendant only received three shares of
stock, by reason of plaintiff's cutting down the
amount of subscription to be allowed defendant

and the Dupont Powder people is indicated by the
following question and answer:

"Q. The stock that these friends of yours
subscribed for, and the three shares that you
got had not been received by you at this time?

A. No."

(Record, p. 58.)

All of the remainder of the $54,000 had to be
delivered over by the defendant to the United En-
gineering people (Record, p. 114).

The correspondence and the excluded cablegrams
relating to requests by defendant on behalf of
himself and others to subscribe for stock in the
"Regulus", indicate fully that he was contracting
for the vessel and was supervising her construction,
as the representative of the defendant, and that the
plaintiff understood that the defendant was building
the vessel not as an officer of the Baja California
Company at all. This correspondence shows that the
services were being performed by the defendant for
the plaintiff, with the realization that the plaintiff as
an individual was the principal in the matter. The
plaintiff advised the defendant that he was not go-
ing to turn the vessel over to the Baja California
Company, but that he was going to form the Pacific
Limited to own and operate her. When the de-
fendant expresses a willingness to subscribe for
$100,000 worth of stock, the plaintiff did not hesi-
tate to cut down a possible subscription by the de-
fendant and those associated with him down to
$54,000, without any inquiry as to what amount

this reduction would enable the defendant himself
to acquire, because of possible commitments to
others by the defendant at a time when his under-
standing was that the plaintiff was willing that the
defendant and others referred to by the defendant
might be permitted to acquire $100,000 worth of
stock.

The "Regulus" was not built for the "Baja Cali-
fornia'' Company, and the plaintiff did not recog-
nize any right in the defendant to subscribe for
stock in connection with her ownership. The mere
fact that plaintiff did not recognize defendant's
right to participate in her ownership is a circum-
stance indicating that the defendant was to be com-
pensated directly for his services.

The defendant's services in contracting for and
supervising the construction of this vessel were
outside any services to be performed by him as
the freight agent of the "Baja California" steam-
ers. The defendant was treated by the plaintiff as
not having any right even to purchase stock in the
company which owned her. Why, then, and under
what theory, is the defendant to be denied compen-
sation for his services in contracting and supervising
her construction?

(e) Assignments of error as to "Regulus" item.

Assignment of Error No. 1:

In sustaining plaintiff's objection to the follow-
ing question propounded by defendant to the witness
C. Henry Smith:

kkQ. Whal was the market value of the 'Reg-
ulars' at the time she was completed, on the first
day of April, 1917 ?"

(Record, p. 229.)

Assignment of Error No. 3:

In sustaining plaintiff's objection to the follow-
ing (183) question propounded by defendant to the
witness C. Henry Smith:

"Q. I will ask you to state whether or not
Mr. Lindvig at any time claimed that you were
not entitled to your commission on the 'Reg-
ulus' until the time that he filed this suit?"

(Record, p. 229.)

Assignment of Error No. 4:

In sustaining plaintiff's objection to the follow-
ing question propounded by defendant to the witness
C. Henry Smith:

UQ. I will ask you to state whether or not
Mr. Lindvig at any time either said to you ver-
bally or in writing that you were not entitled to
your commission on the 'Regulus' prior to the
first day of December, when a question was
raised in regard to that matter in a letter writ-
ten by Mr. Frank, which is carried into the bill
of particulars?"

(Record, p. 229.)

Assignment of Error No. 25:

In sustaining plaintiff's objection to the offer in

evidence of the following cablegram relating to stock

in the corporation owning the " Regulus" from the

defendant to the plaintiff, dated January 11, 1916 :

' ' Stock accepted letter twenty-first December."

(Record, p. 238.)

Assignment of Error No. 20:

In sustaining plaintiff's objection to defendant's
offer in evidence of the following cablegram from
the plaint ill' to the defendant, dated January 19,
1916, and relating to stock in the corporation own-
ing the "Regulus":

44 If you don't wish to overtake full amount
two hundred thousand Kroner Pacific I can dis-
pose of about one hundred thousand Kroner here
please telegraph. ' '

(Record, p. 238.)

Assignment of Error No. 48:

In refusing to give instruction No. 17, requested
by the defendant, and reading :

"I charge you that the agency contract entered
into by and between A. O. Lindvig and C. Henry
Smith on June 29, 1914, had sole reference to
C. Henry Smith acting as the agent for the
' A/S Baja California' in the operation of steam-
ers between Mexican, Central America, West
Coast of United States, and British Columbia
ports ; and I instruct you that the services ren-
dered by C. Henry Smith in contracting for, and
supervising the construction of the ' Romulus'
and 'Regulus', and in purchasing the ' Governor
Forbes', were not included within his duties as
agent under said contract of June 29, 1914."

(Record, p. 247.)

Assignment of Error No. 49:

In refusing to give instruction No. 23, requested
by the defendant, and reading:

"I instruct you that it is not necessary for
the defendant (194) to prove an express promise

by the plaintiff to compensate the defendant for
his services in connection with the contracting
and building of the 'Regulus' and 'Romulus'.
It is sufficient for the defendant if he proves
in this behalf that the services rendered by him
in connection with the contracting and building
of said vessels wrere outside of the scope of his
duties under the agency contract of June 29,
1914, and that his services in connection with the
contracting and building of said vessels were
beneficial to the plaintiff, and were of such a
nature, and rendered under such circumstances
as to imply a promise upon the part of the plain-
tiff to pay for such services.7'

(Record, p. 247.)

III. THE COMMISSION FOR CONTRACTING AND SUPERVISING
THE "ROMULUS"— $10,000.

(a) Quotation from and references to the record relating to
assignments of error.

On September 15, 1916, the defendant, "as rep-
resenting A. O. Lindvig of Christiania, Norway",
entered into a contract with the Union Iron Works
for the construction of a 6000-ton vessel for $775,000
(Record, p. 82).

Defendant had been working on the matter of se-
curing such a contract since December, 1915, and
between December, 1915, and September, 1916, had
obtained various options for the building of similar
vessels by different yards about the bay.

" Between December, 1915, and September,
1916, I obtained a number of options for Mr.
A. O. Lindvig for the building of 6000 ton ves-
sels by various yards here, and we finally came

to the conclusion of closing this contract for
the construction of Hull 154 as the 'Romulus'
was called during the time of her building.' '

(Record, p. 81.)

This vessel was also built in the Oakland estuary,
and a considerable amount of defendant's time was
occupied in going over to where the vessel was being
built and conferring in regard to the carrying out
of the plans (Record, p. 81).

With respect to the "Romulus" the defendant
also indicated to the plaintiff that he would like to
be permitted to subscribe for some stock; but was
finally informed by the plaintiff that the latter had
decided to keep the vessel entirely to himself and
not form any company to take over her ownership.

On September 13, 1916, just two days prior to en-
tering into the contract for the construction of the
"Romulus", the defendant cabled plaintiff:

"New contract 6000 tonner eventually stock
desired about $50,000."

(Record, p. 92.)

On July 16, 1917, the defendant cabled the plain-
tiff:

"Have you decided regarding fifty thou-
sand dollar stock I asked you to reserve Sep-
tember last year second new building stop.
Please let me have the information now, as it
is of importance to me. Smith."

(Record, p. 76.)

On July 20, 1917, the plaintiff cabled the de-
fendant :

"No decision stock second new building, but
shall probably keep the boat myself."

(Record, p. 76.)

The defendant further testified:

"As a matter of fact I never owned any
stock, or acquired any stock in the company
that took over hull one hundred and fifty-four
('Romulus'), if any company ever took her
over. ' '

(Record, p. 76.)

The defendant testified:

"The vessel was commandeered by the United
States Shipping Board under their letter, dated
August 24, 1917, and I continued to send cable-
grams to Mr. Lindvig concerning this matter
during Septemebr, and to correspond with the
United States Shipping Board in regard to it.
In my account to Mr. Lindvig of October 15,
1917, I included the following items :

"Office remuneration of handling contract
Union Iron Works, a/c Hull 154, attending to
payments, etc., $10,000.00."

(Record, p. 76.)

This $10,000 to defendant was included by plain-
tiff to the Federal Government as one of the items
of the vessel's cost, when plaintiff submitted the
items of cost paid out by him to the United States
Shipping Board, which was appointed to represent
Norwegian owners of commandeered vessels.

The copy of the bill submitted by plaintiff to the
United States Shipping Board, and produced by
plaintiff upon the trial at the demand of the de-
fendant, reads:

"July 3, 1918.

United States Shipping Board
to

A. O. Lindvig,

Kristiania, Norway.

For disbursements, account build-
ing Hull No. 154, known as S.S.
"Romulus", commandeered by
the United States Government......$232,500.00

Union Iron Works, payments on

building contract .' 232,500.00

Edward S. Hough, services rendered

superintending building of ship... 1,250.00

C. Henry Smith, cost of cables re-
garding building of ship and con-
tract, to and from Kristiania,
Norway 2,000.00

C. Henry Smith, Remuneration
for Procuring and Handling
Contract, Union Iron Works,
Attending to Payments, Etc 10,000.00

Nathan H. Frank, services rendered
matter of proposed requisition of
said vessel 800.00

A. O. Lindvig, expenses of inspector

Hooslef 1,876.50

$248,926.50"
(Record, p. 93.)

John McClelland, with Henry Lund & Co., im-
porting, exporting and shipping agents, testified
that they had contracted for the building of ves-
sels at San Francisco for the account of owners
at Norway, and that for defendant's services in
contracting for the building of the "Regulus" and
"Romulus" he should have received one and one-
half per cent of the contract prices as a minimum
(Record, p. 135).

(b) Assignments of error as to "Romulus" item.

No. 2. In sustaining plaintiff's objection to
the following question propounded by defendant to
C. Henry Smith:

"Q. What was the market value of the
'Romulus' at the time of her completion?"
(Record, p. 229.)

No. 48. In refusing to give instruction No. 17,
requested by the defendant, and reading:

"I charge you that the agency contract en-
tered into by and between A. O. Lindvig and
C. Henry Smith on June 29, 1914, had sole
reference to C. Henry Smith acting as the
agent for the 'A/S Baja California' in the op-
eration of steamers between Mexican, Central
American, West Coast of United States, and
British Columbia ports; and I instruct you
that the services rendered by C. Henry Smith
in contracting for, and supervising the con-
struction of the 'Romulus' and 'Regulus', and
in purchasing the 'Governor Forbes', were not
included within his duties as agent under said
contract of June 29, 1914."

(Record, p. 247.)

No. 49. In refusing to give instruction No. 23,
requested by the defendant, and reading:

"I instruct you that it is not necessary for
the defendant to prove an express promise by
the plaintiff to compensate the defendant for
his services in connection with the contracting
and building of the 'Regulus' and 'Romulus'.
It is sufficient for the defendant if he proves in
this behalf that the services rendered by him
in connection with the contracting and build-

Lng of said vessels were outside of the scope of
his duties under the agency contract of June
29, L914, and thai his services in connection
with the contracting and building of said ves-
sels were beneficial to the plaintiff, and were
of such a nature, and rendered under such cir-
cumstances as to imply a promise upon the part
of the plaintiff to pay for said services."

(Record, p. 247.)

In directing a verdict in favor of the plaintiff,
assignments 29 and 51 (Record, pp. 239, 247).

IV. COMMISSION PURCHASE "GOVERNOR FORBES"— $6000.
(a) References to record relating to assignments of error.

Mr. Smith arranged to buy the "Governor
Forbes" in September, 1916, for $340,000, with a
2 per cent commission. This 2 per cent was
mentioned in his opening cablegram to Mr. Lind-
vig, which stated: " ' Governor Forbes' offered firm
$350,000 plus 2 per cent commission' ' (Record,
p. 94). When the "Governor Forbes" arrived at
San Francisco, Mr. Smith was in Europe, and it
was not discovered until the examination of his
books by public accountants in late October, 1917,
that the commission had not been previously
charged (Record, p. 145).

But whether under an express contract or upon
a quantum meruit Mr. Smith was entitled to this
commission. As he testified:

kkI purchased the steamer and I took the re-
sponsibility for inspection and classification
that she was as represented and I delivered
the steamer to him.''

(Record, p. 94.)

(b) Assignment of errors as to commission on purchase of
"Governor Forbes".

No. 5. In sustaining plaintiff's objection to the
following question propounded by the defendant to
the witness, C. Henry Smith:

"Q. What was the value of the ' Governor
Forbes', the market value here in San Fran-
cisco, at the time of her delivery in 1917 V

(Record, p. 230.)

No. 47. In refusing to give instruction No. 15,
requested by the defendant, and reading:

"The defendant is entitled to recover a com-
mission on the purchase of the * Governor
Forbes', notwithstanding he may have entered
into an agreement for the purchase of said
vessel in November, 1916, and notwithstanding
the payment of her purchase price, may have
been completed in the spring of 1917, provided
3^ou believe from the evidence that the services
rendered by the defendant in connection with
the cablegrams exchanged between him and the
plaintiff entitled him to such a commission, and
provided you believe that the omission to enter
said commission upon any of the accounts pre-
sented to the plaintiff prior to October 1, 1917,
was due to inadvertence and mistake."

(Record, p. 246.)

No. 48. In refusing to give instruction No. 17,
requested by the defendant, and reading:

"I charge you thai the agency contract en-
tered into by and between A. (). Lindvig and C.

Henry Smith on Juno 29, 1914, had solo refer-
ence to C. Henry Smith, acting as the agent for
the 'A/S Baja California' in the operation of
steamers between Mexican, Central American,
West Coast of United States, and British Co-
lumbia ports; and I instruct you that the
sci vices rendered by C. Henry Smith in con-
tracting for, and supervising the construction
of the 'Romulus' and 'Regulus', and in pur-
chasing the 'Governor Forbes', were not in-
cluded within his duties as agent under said
contract of June 29, 1914."

(Record, p. 247.)

V. "SOALOA" SALVAGE ACCOUNT— $3165.27.

(a) Quotations from and references to the record relating* to
assignments of error.

All of the evidence offered by the defendant was
excluded. The defendant offered to show that the
"Sinaloa" went aground in the fog near Cape
Blanco, Mendocino County, on the morning of June
16, 1916 ; that Lindvig requested Smith to do every-
thing possible to save her; that Smith went imme-
diately to the vessel, contracted for her salving,
co-operated with the underwriters, disbursed the
funds, and that when she was floated, Smith had
her brought to San Francisco and there submitted
her to competitive bidding, and afterwards when
the lowest bidder did not care to go on with the
work, he took the matter up with the United States
Shipping Board and arranged that the repairs be
proceeded with in order to enable the "Sinaloa" to

continue the carrying of nitrate for the Dupont de
Nemours Company (Record, pp. 105-109).

Wilferd Page, of George E. Billings Company,
general average adjusters, produced a printed book
which constituted an adjustment of the general
average and salvage expenses in connection with the
wreck of the "Sinaloa" (Record, p. 132). This
book was completed in August or September, 1918
(Record, p. 132). Copies of this book were deliv-
ered to Mr. Lindvig, for the owners of the vessel
(Record, p. 132). On page 226 of this book appears
the following item:

" $3,165.27. C. Henry Smith, remu-
neration for handling a/c 5%
com. on $63,305.54 $3,165.27 ' '

(Record, p. 131.)

After showing by Mr. Page that copies of this
book were delivered to Mr. Lindvig, an objection
was sustained and an exception noted in respect of
the following question asked Mr. Page by the de-
fendant :

"Q. I will ask you to state whether Mr.
Lindvig ever thereafter, or any member of his
office, dissented from the item therein con-
tained, the $3165.27 allowed to Mr. Smith in
connection with his services with respect to the
salvaging of this vessel?"

(Record, p. 132.)

In respect to the cargo, objection was sustained
and exception noted as to the following question to
Mr. Page:

"Q. Was there any contribution to be made
by them to the general average?"

After stating that he had nothing to do with the
collections from the underwriters, objection was
sustained and exception noted in respect of the fol-
lowing question:

"Q. So far as the cargo was concerned, do
you know whether or not Mr. Lindvig has, in
fact, collected from the cargo upon the basis
of including in the general average this item of
$3165.27 allowed to Mr. Smith t"

(Record, p. 133.)

John A. Bishop, with Johnson & Higgins, average
adjusters, testified:

"Q. Have you had occasion at numerous
times to observe what is the practice, if any,
with respect to allowance to general agents of
reimbursement to themselves for services ren-
dered in connection with salvaging of vessels
where their contracts provide that they shall
have a fixed percentage of the freight earned
or carried?

A. I have had numerous instances.

Q. Numerous instances? A. Yes.

Q. Will you name a few of the instances
that you remember in which you have made ob-
servation in connection with that practice or
custom ?

A. Williams, Dimond & Co., agents of the
American-Hawaiian Steamship Company, Len-
non Gray, who was the agent for some British
shipowners, Balfour, Guthrie & Co., agents for
the Harrison Direct Line. We have had sev-
eral instances for Williams, Dimond, as agents
for the American-Hawaiian Line. I suppose I
could name at least from six to eight without
going back on my records at all.

Q. Would you do that, please?

A. In the case of the 'Alaskan' belonging
to the American-Hawaiian Line, Williams, Di-
mond & Co. were general agents on the Coast;
she was on fire in San Diego in 1910. The
'Pennsylvania' was also on fire down near Pan-
ama, bound for San Francisco; the 'Anubis',
of the Cosmos Line, went ashore in, I think it
was, 1908, near Santa Barbara, on San Miguel
Island ; Lennon Gray was the agent for the Cos-
mos Line at that time. The 'Pleiades' was
ashore on the Southern California coast, be-
longing to the Luckenbach Steamship Company,
Williams, Dimond & Co. were agents. The ' St.
Nicholas', a British vessel, was on fire bound
in to San Francisco, Balfour, Guthrie & Co.
were agents; the 'Queen Alexandria' struck on
the Columbia River Bar, putting into San Fran-
cisco, E. C. Evans, of San Francisco, were
agents."

(Record, p. 128.)

The questions which follow were then asked Mr.
Bishop, objections sustained to them and exceptions
to the rulings noted by the defendant:

"Q. I will ask you to state whether or not,
in all the cases mentioned by you occurring
with respect to the vessels named, of which
Williams, Dimond & Co. were the agents, and
Mr. Gray was the agent, and Evans was the
agent, whether or not in each and every of these
cases the general agent was allowed compensa-
tion for the services rendered by him in con-
nection with those vessels?

Q. I will ask you whether or not it is the
custom in all cases where the general agents
render services in connection with the salvage
of the vessel, to not only allow him from his
principal a compensation for the general ser-
vices in connection therewith, but an allowance

of -1 2 per cenl in the total amount of disburse-
ments in connection therewith, if the money be
thai of his principal, and 5 per cenl if the

money be that of himself?

Mr. MoOKB. 1 will ask you, Mr. Bishop, what
is the fad as to whether or not there is a uni-
form custom in San Francisco, and has been
for twenty years last past, of allowing general
agents of steamers and steamship companies,
special compensation for their services rendered
in connection with salvaging of vessels, and a
commission of 2% per cent upon moneys ad-
vanced by them, if the money belongs to the
owners and 5 per cent in cases where the gen-
eral agency contract specifies 5 per cent as the
compensation therein mentioned in respect to
freight earned?"

(Record, pp. 129-130.)

In addition to the assignments of error in respect
to the sustaining of objections to the above ques-
tions to Mr. Bishop (Assignments 6-12, Record, pp.
230-232), the following offer of proof and errors
were assigned in connection with this "Sinaloa"
Salvage item:

"Q. Now, your charge in respect to the
' Sinaloa' salvage item is $3165.27, and T want
to take that item up next.

Mr. Frank. We will have to object initially
to anything at all wTith reference to salving the
' Sinaloa' because the ' Sinaloa' was one of the
vessels in the employ of the steamship line, and
he being in that employ at that time, it was
a part of his duty as general agent to take
care of the vessels.

The Cottrt. I will tell you what I think
would be the better way. I think you had best
make to the Court a brief statement of the
character of the evidence you propose to offer

in support of this item, and the Court will
then pass upon that as a statement — I mean
pass upon the question then as to whether or
no under that statement it is within or outside
the lines of his contract.

Mr. Moore. I propose to show that on June
14, 1917, the 'Sinaloa' ran aground in a fog a
mile south of Cape Blanco, and that on June
15th Mr. Smith received a wire from the cap-
tain of the vessel to that effect; that on the
same day he, Mr. Smith, started a tug from
Coos Bay, which was expected to arrive at the
place where the vessel was in four or five
hours; that he was further wired by the cap-
tain that he must have assistance, the vessel
was leaking badly, there was water in the after-
hold, and that Mr. Smith left that same night
for Cape Blanco with Captain Curtis of the
Marine Underwriters, going overland to Eu-
reka, and from there by boat north to the ves-
sel at Cape Blanco; that before arriving he
wired the captain he was sending men and ca-
bles and equipment; and that on July 11th, a
barge was installed alongside the vessel and all
of the gear was received ; that he facilitated the
saving of the ship; that he had a great deal
of correspondence with the plaintiff in regard
to her, and what should be done with respect to
her, and in the adjustment upon her, and a
great deal of correspondence with the people
doing the salvaging operation ; that the defend-
ant insisted she be towed to San Francisco;
and when there he submitted her to bids of
the different shipbuilding companies ; that there
were three bids given for her repairs, the low-
est being by the United Iron Works for $135,-
000.00, and the next lowest being $200,000.00;
and that the United Iron Works did not want
to do the job because they were immediately
afterward commandeered by the Government;

and thai Mr. Smith then took up the matter
with the Shipping Hoard, and obtained a per-
mit from the Shipping Board providing for
the repairing of the vessel by the United Iron

Works.

Mr. Frank. I have nothing to say except-
ing that it is incompetent and immaterial, the
statement he has made."

The defendant then offered to introduce certain
cablegrams, stating :

"It is for purpose of showing services ren-
dered by Mr. Smith in connection with the sal-
vage of the 'Sinaloa' amounting to some $2000,
which represents 5% of the sum total of $60,-
000 that was paid out. I want to state the pur-
pose. That was advanced by Mr. Smith, and
showing the communications between himself
and Mr. Lindvig during the course of that time
and the requests that were made upon him by
Mr. Lindvig, in the matter and the appoint-
ment by Mr. Smith and the revocation of the
appointment by Mr. Lindvig as to the appoint-
ments made by Smith."

(Record, pp. 104-106.)

(b) Assignments of error as to ''Sinaloa" salvage item.
Assignment of Error No. 13:

In sustaining plaintiff's objection to the offer by
defendant in evidence of the following items from
the "Statement of General Average, case of the
1 Sinaloa', June 15, 1917":

"$3,165.27 C. Henry Smith — Re-
muneration for handling a/c 5%
Com. on $63,305.54 $ 3,165.27

"Provisions $38.07, General Average,

2826.95. Advances 274.90

4 'Vessel & Owners, $35.35.
$4,290.82. Disbursing the General
Average :
With funds in hand 2!/>% on

$8,552.19 213.80

Without funds in hand 5%,

$81,540.32 4,077.02

As customary 4,290.82 ' '

" $11,380.74 Interest on General Av-
erage Disbursements and allow-
ances from date of outlay until
probable date of settlement, $108,-
388.77 at 7% per annum $11,380.74 "

(Record, pp. 232-233.)

Assignment of Error No. 14:

In sustaining plaintiff's objection to the offer in
evidence by the defendant of the following cable-
grams exchanged between the plaintiff and the de-
fendant :

6 ' June 16, 1916.
" 'Sinaloa' aground near Cape Blanco in fog
this morning have sent tug for assistance.

Smith."

' ' June 17, 1916.
"Alta sailed for Melbourne stop Sinaloa po-
sition very difficult stop broadwide to the beach
stop leaking stop ten feet water aft hold.

Smith."

"June 19, 1916.
"Wilcox Peck Hughes attending average Sin-
aloa.

Lindvig. ' '

"June 20, 1916.
"Urgent Wilcox cable chance floating Sina-
loa slight stop everything possible must be done
to save her.

Lindvig/ '

"June 20, 1916.
"Kindly cable amount Sinaloa insured stop
Smith now at ship stop after hold flooded no
water forward stop discharging cargo onto
barges.

Smith."

"June 22, 1916.
"Steamer Sinaloa insured as follows Seven
hundred thousand kroner s full three hundred
thousand hull interest hundred thousand freight
interest stop understand now prospects save
ship stop condemnation must be avoided if by
any means possible.

Lindvig."

"June 21, 1916.
' ' Sinaloa appointed Johnson and Higgins ad-
justers stop thev are agents for Skuld.

Smith."

"June 23rd, 1916.
"Steamer Sinaloa you must adhere to my
instructions appoint Wilcox Peck & Hughes
who are agents main hull underwriters stop
should otherwise have no objection employ
Johnson Higgins.

Lindvig. ' '

"June 23, 1916.
"Believe Sinaloa may be floated according to
experts stop assembling fuel equipment to go
north stop vessel in a rather protected position
during summer.

Smith."

"June 29, 1916.
"Please insure ocean going barge sent to Sin-
aloa value fifteen thousand dollars.

Smith."

"July 2, 1916.
" Covered hull insurance barge fifteen thou-
sand dollars two per cent voyage Frisco to
steamer Sinaloa therefrom to Puget Sound or
Frisco.

Lindvig. ' '

"June 30, 1916.
"Please place insurance salvage equipment
sent abroad Phoenix and ocean going barge to
Sinaloa valued at twenty-five thousand dollars.

Smith.' '

"July 3, 1916.

"Steamer Sinaloa referring your cables 29/6
and 30/6 we have insured two barges and equipment
in all 40,000 dollars value is this correct.

Lindvig.,,

(Record, pp. 233-235.)

Assignment of Error No. 15:

In sustaining plaintiff's objection to the following
question propounded by the defendant to the wit-
ness C. Henry Smith:

"Q. I will ask you to state whether you ar-
ranged where the vessel should be brought to
when she was taken away or when she was
floated."

(Record, pp. 235-236.)

Assignment of Error No. 16:

In sustaining plaintiff's objection to the follow-
ing question propounded by the defendant to the
witness C. Henry Smith :

"Q. I will ask you to state whether or not
you submitted the repairs of the vessel to differ-
ent shipbuilding yards here in San Francisco
on the lowest bid?"

(Record, p. 236.)

Assign))/ (tit of Error No. 17:

In sustaining plaintiff's objection to the follow-
ing question propounded by the defendant to the
witness Wilfred Page:

"Q. What became of the different copies of
bound volume entitled ' Statement of the Gen-
eral Average Case of the "Sinaloa", June 15,
1917', as they were made up, what disposition
was made of them1?"

(Record, p. 236.)

Assignment of Error No. 18:

In sustaining plaintiff's objection to the follow-
ing question propounded by the defendant to the
witness Wilfred Page:

"Q. I will ask you to state whether Mr.
Lindvig ever thereafter or any member of his
office, dissented ifrom the item therein con-
tained, the $3,165 allowed to Mr. Smith in con-
nection with his services with respect to the
salvaging of this vessel?"

(Record, p. 236.)

Assignment of Error No, 19:

In sustaining plaintiff's objection to the follow-
ing question propounded by the defendant to the
witness Wilfred Page:

"Q. Was there any contribution to be made
by them (Dupont Company) to the general
average?"

(Record, pp. 236-237.)

Assignment of Error No. 20:

In sustaining- plaintiff's objection to the follow-
ing question propounded by the defendant to the
witness Wilfred Page:

(Record, p. 237.)

VI. COMMISSION DUPONT CONTRACT— $25,517.80.

(a) References to record relating to assignments of error.

For the return voyages of these vessels Mr. Smith
entered into a yearly contract for the carriage of
nitrate with the Dupont de Nemours Company. The
last of these contracts entered into by Mr. Smith
was dated July 10, 1917. This contract covered
the carrying of 40,000 tons during the year June 1,
1917— June 1, 1918. Mr. Lindvig instructed
Mr. Smith to first obtain the consent of the British
Admiralty before entering into this contract and
meantime not to fix for more than one voyage at a
time, but Mr. Smith considered such a course
impracticable and unnecessary, and therefore
entered into the contract in his own name, and

so worded the contract as to permit the nitrate to
be carried by steamers oilier than the "Baja Cali-
fornia", "Sinaloa" and "Regulus". After-
ward when Mr. Lindvig continued to object to the
contract because the consent of the British Ad-
miralty had not been obtained, Mr. Smith advised
both Mr. Lindvig and the Dupont Company that he
would carry out the contract himself if Mr. Lind-
vig did not care to do so. Mr. Smith also notified
Mr. Lindvig that if he took over the nitrate contract
it would be subject to Mr. Smith's 5 per cent com-
mission (Record, pp. 110-111).

In his letter to plaintiff of October 6, 1917,

defendant states:

"I am personally responsible for this agree-
ment made with the Dupont Company, and I
shall carry it out myself, if you do not."

(Record, p. 113.)

In writing to Mr. W. A. Simonton, traffic man-
ager of the Dupont Company, on October 5, 1917,
defendant stated:

"If any trouble should be made, however, I
can get the necessary tonnage in 60 or 90 days
or even earlier." (Record, p. 113.)

The contract was actually taken over and carried
out by Mr. Lindvig.

(b) Assignments of error as to commission on Dupont con-
tract.
Assignment of Error No. 33:

In refusing to give instruction No. 9, requested
by the defendant, and reading:

"If you find that defendant lias performed
on his part all the acts necessary to the accom-
plishment of a particular result, such as the
freighting of 40,000 tons, 10% more or less,
of cargo in plaintiff's vessels, for and on be-
half of the du Pont de Nemours Powder Com-
pany, defendant cannot be deprived of his
right to the entire compensation by the re-
fusal or neglect of the plaintiff to thereafter
perform the necessary acts on his part, where-
by the contemplated result is defeated or only
partly executed."

(Record, p. 240.)

Assignment of Error No. 34:

In refusing to give instruction No. 10, requested

by the defendant, and reading:

"The failure, refusal or inability of plaintiff
to carry out the complete contract for the
transportation of 40,000 tons, 10% more or
less, of cargo for the du Pont de Nemours
Powder Company does not defeat defendant's
right to full compensation for negotiating this
contract, nor is this right defeated by the fact,
if it be a fact, that plaintiff and the du Pont
de Nemours Powder Company subsequently
modified, rescinded or cancelled the contract
or a part thereof by mutual consent."

(Record, p. 240.)

Assignment of Error No. 35:

In refusing to give instruction No. 11, requested
by the defendant, and reading:

"If you find that plaintiff carried out or
offered to perform the agreement with du Pont

de Nemours Powder Company, or a part of
said agreement, with knowledge of the whole
agreement, I instruct you that such conduct on
the part of plaintiff constitutes a ratification of
the whole agreement, and that defendant is en-
titled to compensation for procuring the said
agreement. ' '

(Record, p. 241.)

Assignment of Error No. 36:

In refusing to give instruction No. 27, requested
by the defendant, and reading:

"I instruct you that, under the contract of
June 29, 1914, the defendant is entitled to a
reasonable commission on the freight earned by
the steamers of the Baja California Company
in performing the contract with the du Pont
de Nemours Powder Company for the trans-
portation from the Republic of Chile, to San
Francisco, California, and elsewhere, of 40,000
tons, 10% more or less, of nitrate."

(Record, p. 241.)

Assignment of Error No. 43:

In refusing to give instruction No. 13, requested
by the defendant, and reading:

"If you find that defendant was to receive
a commission for contracts made for the bene-
fit of plaintiff and that, during the term of his
agency, he procured contracts for the benefit
of plaintiff, I instruct you that defendant
is entitled to commissions not merely on the
contracts which were performed before the ter-
mination of the defendant's agency, but that
defendant is also entitled to commissions on all
contracts secured by him, and performed, or to

be performed, by plaintiff subsequent to the
termination of defendant's agency."

(Record, p. 244.)

VII. BALANCE ESTIMATED FREIGHT EARNINGS— $5000.

(a) Reference to record in connection with assignments of
error.

This item relates to cargo booked prior to October
1, 1917, but not actually loaded on board until after
October 1st.

(Record, p. 119.)

The agency terminated upon October 1st, but it
is the defendant's contention that the commission
on the freight above mentioned was " earned" as
of October 1st.

(b) Assignments of error as to commission on freight booked
prior to October 1st.

Assignment of Error No. 43:

In refusing to give instruction No. 13, requested
by the defendant, and reading:

"If you find that defendant was to receive
a commission for contracts made for the ben-
efit of plaintiff and that, during the term of
his agency, he procured contracts for the ben-
efit of plaintiff, I instruct you that defendant
is entitled to commissions not merely on the
contracts which were performed before the
termination of the defendant's agency, but
that defendant is also entitled to commissions
on all contracts secured by him, and performed,

or to be performed, by plaintiff subsequent to
the termination of defendant's agency.''

(Record, p. 244.)

Assignment of Error No. 44:

In refusing to give instruction No. 20, requested
by the defendant, and reading:

"As to the item of $2049.65 as defendant's
commission on the inward freight of the ' Gov-
ernor Forbes', I charge you as a matter of law
that your verdict should be in favor of the de-
fendant."

(Record, p. 245.)

VIII. COMMISSION ON INWARD FREIGHT "GOVERNOR FORBES"—

$2049.05.

(a) Reference to record in connection with assignments of
error.

This item relates to the inward freight of the
1 ' Governor Forbes" on her voyage arriving here
on October 3 or 4, 1917 (Record, p. 123). She
left Guayaquil in September, 1917, with a cargo of
cocoa, and the $2,049.65 is 5 per cent of the freight
money paid for carrying the cocoa.

(b) Assignments of error as to commission on inward freight
" Governor Forbes".

Assignment of Error No. 43:

In refusing to give instruction No. 13, requested

by the defendant, and reading:

kkIf you find that defendant was to receive
a commission for contracts made for the ben-
efit of plaintiff, and that, during the term of
his agency, he procured contracts for the ben-
efit of plaintiff, I instruct you that defendant
is entitled to commissions not merely on the
contracts which were performed before the ter-
mination of the defendant's agency, but the de-
fendant is also entitled to commissions on all
contracts secured by him, and performed, or
to be performed, by plaintiff subsequent to the
termination of defendant's agency."

(Record, p. 244.)

Assignment of Error No. 44:

In refusing to give instruction No. 20, requested

by the defendant, and reading:

"As to the item of $2049.65 as defendant's
commission on the inward freight of the ' Gov-
ernor Forbes', I charge you as a matter of law
that your verdict should be in favor of the de-
fendant. ' '

(Record, p. 245.)

No. 3682

%n\teb £>tataa

ffitrnttt (tori of Appeal*

Jfnr % Sftttfy Circuit.

(IN THREE VOLUMES.)

THE UNITED STATES OP AMERICA,

Appellant,

vs.

CALIFORNIA MIDWAY OIL COMPANY, ASSO-
CIATED OIL COMPANY, COLUMBUS
MIDWAY OIL COMPANY, 32 OIL COM-
PANY, L. B. McMURTRY, J. M. McLEOD,
and STANDARD OIL COMPANY,

Appellees.

VOLUME I.

(Pages 1 to 384, Inclusive.)

Upon Appeal from the United States District Court
for the Southern District of California,
Northern Division.

F I L

Fiimer Bros. Co. Print, 330 Jackson St., S. F., Cal.

No. 3682

ffitrrutt (Emtri of KppmU

Jfar % Ninth dirruU.

Sfomtftripf of S?ror&.

(IN THREE VOLUMES.)

THE UNITED STATES OF AMERICA,

Appellant,

vs.

CALIFORNIA MIDWAY OIL COMPANY, ASSO-
CIATED OIL COMPANY, COLUMBUS
MIDWAY OIL COMPANY, 32 OIL COM-
PANY, L. B. McMURTRY, J. M. McLEOD,
and STANDARD OIL COMPANY,

Appellees.

VOLUME I.
(Pages 1 to 384, Inclusive.)

Upon Appeal from the United States District Court
for the Southern District of California,
Northern Division.

Mimer tiros Co. Prim. 330 JaoKson til.. 6. e .. Gal.

INDEX TO THE PRINTED TRANSCRIPT OF

RECORD.

[Clerk's Note: When deemed likely to "be of an important nature,
errors or doubtful matters appearing in the original certified record are
printed literally in italic; and, likewise, cancelled matter appearing in
the original certified record is printed and cancelled herein accord-
ingly. When possible, an omission from the text is indicated Im-
printing in italic the two words between which the omission seems to
occur.]

Page

Amended Bill of Complaint 4

Answer of California Midway Oil Company .... 20

Answer of Defendant L. B. McMurtry 69

Answer of Defendants Thirty-two Oil Company

and J. M. McLeod 42

Assignment of Errors 112

Certificate of Clerk U. S. District Court to Tran-
script of Record 931

Certificate of Judge to Statement of Evidence . . 929

Citation on Appeal , 1

Decree of Dismissal ; 109

DEPOSITIONS ON BEHALF OF PLAIN-
TIFF:

BACON, JOHN L 155

Cross-examination 155

BANKS, SAMUEL R 382

Cross-examination 391

BASHORE, HARRY E 676

Cross-examination 700

Redirect Examination 702

BERRY, GEORGE W 338

Cross-examination 348

Redirect Examination 360

ii The United States of America vs.

Index. Page

DEPOSITIONS ON BEHALF OF PLAIN-
TIFF— Continued :

Recross-examination 360

BLACKMAN, FEANK B 156

CHAPMAN, FRANK B 164

Cross-examination 179

Redirect Examination 216

CHRISTMAN, WELLINGTON F.. ..... . 703

Cross-examination 710

Redirect Examination 715

CRANSTON, VICTOR G. . . 162

Cross-examination 163

CUNNINGHAM, JESSE 1 127

Cross-examination 131

DENISON, FRANKLIN H 147

Cross-examination 149

Redirect Examination 150

DUNBAR, CHARLES A 122

Cross-examination . ., 125

FARRELL, JOSEPH EDWARD 545

Cross-examination 556

FREEMAN, SMITH H 493

Cross-examination 503

Redirect Examination 506

GARDINER, CHARLES W 217

Cross-examination 236

Redirect Examination 247

HAGENBUCK, HARRY 159

Cross-examination 159

HARDER, .JULIUS F 402

Cross-examination 425

California Mid/way Oil Company et al. iii

Index. Page

DEPOSITIONS ON BEHALF OF PLAIN-
TIFF—Continued :

Redirect Examination 445

Recross-examination 450

HATCH, EMALINE 716

HUSBANDS, WILLIAM JOSEPH 162

Cross-examination 162

KEENAN, WILLIAM A 609

Cross-examination 621

Redirect Examination 622

LEE, THOMAS H , 161

METZ, EUGENE 586

Cross-examination 593

Redirect Examination ( 595

MAHR, WILLIAM A 525

Cross-examination 537

Redirect Examination 543

MORNINGSTAR, OUT A 152

Cross-examination 152

NEWHOF, SIMON 143

Cross-examination 145

NORTON, JAMES 159

Cross-examination 160

NORTON, JOSEPH 160

O'NEILL, BERNARD M 153

Cross-examination 154

PENTZ, JULIUS W 361

Cross-examination 369

POWELL, EDWIN L 309

Cross-examination 329

Redirect Examination 335

iv The United States of America vs.

Index, Page

DEPOSITIONS ON BEHALF OF PLAIN-
TIFF— Continued :

PKATT, FRANCIS E 452

Cross-examination 461

Redirect Examination 472

Recross-examination 472

Redirect Examination 474

RENTSCHLER, HARRY B 145

Cross-examination 146

RICHMOND, JULIAN P. W 278

Cross-examination 294

Redirect Examination 304

ROLL, HOKAN 157

Cross-examination 157

ROMAINE, JR., FRANK H 572

Cross-examination 583

Redirect Examination 586

SHADBURNE, L. A 119

Cross-examination 122

TAYLOR, FRANK D 507

Cross-examination 520

Redirect Examination 523

Recross-examination 525

THICKENS, JOHN B 737

Cross-examination 740

Redirect Examination 744

Recross-examination 745

Redirect Examination 745

THORN, CHARLES W 665

Cross-examination 676

THORN, FREDERICK S 393

California Midway Oil Company et al. v

Index. Page
DEPOSITIONS OX BEHALF OF PLAIN-
TIFF—Continued :
Cross-examination 399

THORN, HARRY B 474

WALKER, C. RUPERT 595

Cross-examination 603

WALKER, HERBERT M 623

Cross-examination 659

Redirect Examination 662

WELCH, RICHARD B 250

Cross-examination 259

Redirect Examination 277

WILSON, WALTER B 560

Cross-examination 567

Redirect Examination 571

DEPOSITIONS ON BEHALF OF DEFEND-
ANTS:

HANDEL, GEORGE F 746

GILLETTE, GEORGE GRANT 862

Cross-examination 863

Redirect Examination 864

EXHIBITS:

Government's Exhibit No. 1 — Ratification of

Power of Attorney Signed by Frank B.

Chapman 167

Government's Exhibit No. 1 — Proxy Dated

August 26, 1910, Signed by Frank B.

Chapman 175

Government's Exhibit No. 6 — Consent to

Distribution of Dividends of Pacific

vi The United States of America vs.

Index. Page

EXHIBITS— Continued :

Oil Lands Company — Dated December
13, 1913 176

Plaintiff's Exhibit No. 4— Power of Attor-
ney from Herbert M. Walker et al. to
L. B. McMurtry, Dated December 19,
1907 877

Plaintiff's Exhibit No. 10— Location No-
tice— Placer Claim, Signed by Herbert
M. Walker et al 881

Plaintiff's Exhibit No. 32— Letter Dated
December 3, 1913, Pacific Oil Lands
Company to Harry B. Thorn 481

Plaintiff's Exhibit No. 33— Contract Dated
May 17, 1909, Between L. B. McMurtry
and J. M. McLeod 895

Plaintiff's Exhibit No. 34— Letter Dated
January 8, 1914, Pacific Oil Lands
Company to Harry B. Thorn 483

Plaintiff's Exhibit No. 35— First Report to
Stockholders of Pacific Oil Lands Com-
pany 484

Plaintiff's Exhibit No. 36— Envelope Ad-
dressed to Harry B. Thorn 490

Plaintiff's Exhibit No. 36— Contract Dated
October 8, 1908, Between L. B. McMur-
try and Mrs. J. M. McLeod 899

Plaintiff's Exhibit No. 37 — Assignment
Dated November 20, 1908, Mrs. J. M.
McLeod to W. D. Wilson et al 901

California Midway Oil Company cf al. vii

Index. Page

EXBDIBITS^Continued:

Plaintiff's Exhibit No. 40— Letter Dated
August 4, 1913, Notice of Meeting of
Stockholders of Pacific Oil Lands Com-
pany 499

Plaintiff's Exhibit No. 40 — Assignment of
Interests in Section 32, Dated December
29, 1908 902

Plaintiff's Exhibit No. 41— Letter Dated
January 8, 1914, Pacific Oil Lands Com-
pany to S. H. Freeman 501

Plaintiff's Exhibit No. 58— Letter Dated
April 24, 1914, F. H. Eomaine, Jr. to J.
McG. Williamson 581

Plaintiff's Exhibit No. 62— Letter Dated
August 17, 1910, J. B. Thickens to C.
Rupert Walker 596

Plaintiff's Exhibit No. 65— Letter Dated
November 12, 1908, C. L. Claflin to Wil-
son & Wheat 911

Plaintiff's Exhibit No. 66— Letter Dated
November 14, 1908, Wilson, Wheat et
al. to C. L. Claflin 912

Plaintiff's Exhibit No. 67— Letter Dated
December 3, 1919, Pacific Oil Lands
Company to C. Rupert Walker 599

Plaintiff's Exhibit No. 68— Letter Dated
January 8, 1914, Pacific Oil Lands Com-
pany to C. Rupert Walker 601

Defendants' Exhibit " B "—Statement of
Lands Held by McMurtry & Hoeppner

viii The railed States of America vs.

Index. Page

EXHIBITS— Continued :

in the Midway Field, Signed W. A.

Williams 913

Defendants' Exhibit "K"— Ratification of
Location of Lands by Board of Asso-
ciated Oil Company 913

Defendants' Exhibit "L"— Letter Dated
June 22, 1911, L. B. McMurtry to Asso-
ciated Oil Company 924

Defendants' Exhibit " 0-1 "—Letter Dated
December 19, 1910, L. B. McMurtry to

O. Scribner , 927

Defendants' Exhibit No. 5— Check Dated
January 8, 1914, Pacific Oil Lands Com-
pany to Wm. F. Christman 714

Defendants' Exhibit No. 4 — Receipt Dated
September 16, 1911, Wm. F. Christman

to L. B. McMurtry 711

Defendants' Exhibit No. 6 — Affidavit of

Jesse I. Cunningham 132

Names and Addresses of Attorneys of Record. . 3

Order Allowing Appeal 115

Order Enlarging Time to and Including March

1, 1920, to File Record and Docket Cause. . . 933
Order Enlarging Time of Return Day of Cita-
tion and Filing of Record and Docketing of

Cause to and Including June 1, 1920 935

Order Enlarging Time of Return Day of Cita-
tion and Filing of Record and Docketing of
Cause to and Including August 1, 1920 938

California Midway Oil Company et al. ix

Index. Page

Order Enlarging Time of Return Day of Cita-
tion and Filing of Record and Docketing of
Cause to and Including November 1, 1920. . 941
Order Enlarging Time of Return Day of Cita-
tion and Filing of Record and Docketing of
Cause to and Including February 1, 1921 . . . 945
Order Enlarging Time of Return Day of Cita-
tion and Filing of Record and Docketing
of Cause to and Including May 1, 1921 .... 949
Order Enlarging Time of Return Day of Cita-
tion and Filing of Record and Docketing of

Cause to and Including June 1, 1921 950

Petition for Appeal 110

Praecipe for Transcript on Appeal 929

Statement of Evidence to be Included in Tran-
script on Appeal in the Above-entitled

Cause 119

Stipulation Enlarging Time of Return Day of
Citation and Filing of Record and Docket-
ing of Cause to and Including August 1,

1920 936

Stipulation Enlarging Time of Return Day of
Citation and Filing of Record and Docket-
ing of Cause to and Including November 1,

1920 940

Stipulation Enlarging Time of Return Day of

Citation and Filing of Record and Docket-
ing of Cause to and Including February 1,

1921 943

Stipulation Enlarging Time of Return Day of

x The United States of America vs.

Index. Page
Citation and Filing of Eecord and Docket-
ing of Cause to and Including May 1, 1921 . . 947
Stipulation Re Statement of Evidence on Ap-
peal 116

TESTIMONY ON BEHALF OF PLAIN-
TIFF:

DENISON, BERT S 150

Cross-examination 151

Redirect Examination 151

Recross-examination 152

GREENLEAF, SUE 747

Cross-examination 749

LONGLEY, PETER R 767

Cross-examination 768

McMURTRY, L. B 769

Cross-examination 791

Redirect Examination 821

Recross-examination 829

Redirect Examination 834

Recross-examination 835

Redirect Examination 835

NETTLIS, CHARLES W 140

Cross-examination 142

SHAW, EARL S 763

Cross-examination 765

TESTIMONY ON BEHALF OF DEFEND-
ANTS:

BRANN, WALTER S 861

CLAFLIN, C. L 839

Cross-examination 842

California Midway Oil Company et ah xi

Index. Page

TESTIMONY ON BEHALF OF DEFEND-
ANTS— Continued :

GORDON, FREDERIC V 864

Cross-examination 864

Redirect Examination 865

LOVE, WILLIAM R 135

Cross-examination , 138

Redirect Examination 140

McLEOD, J. M 866

Cross-examination 868

MEINECKE, GEORGE A 716

Cross-examination 717

Redirect Examination 727

Recross-examination 737

PRICE, W. C 865

RICKETTS, A. H 870

Cross-examination 871

SCRIBNER, OTHELLO 857

Cross-examination 860

SNOOK, WALTER 874

Cross-examination 875

STRASSBURGER, ISAAC 871

WATSON, DOUGLAS S 842

Cross-examination , 856

WERN, OTIS E 876

WIBLE, S. P 872

Cross-examination 873

Redirect Examination 874

In the District Court of the United States for the
Southern District of California, Northern Divi-
sion, Ninth Circuit.

IN EQUITY— No. B-10.

UNITED STATES OP AMERICA,

Plaintiff,

vs.

CALIFORNIA MIDWAY OIL COMPANY, AS-
SOCIATED OIL COMPANY, COLUMBUS
MIDWAY OIL COMPANY, 32 OIL COM-
PANY, L. B. McMURTRY, J. M. McLEOD
and STANDARD OIL COMPANY,

Defendants.

Citation on Appeal.

The United States of America — ss.
To California Midway Oil Company, Associated Oil
Company, Columbus Midway Oil Company, 32
Oil Company, L. B. McMurtry, J. M. McLeod,
and Standard Oil Company, GREETING:
YOU ARE HEREBY CITED and admonished to
be and appear at a United States Circuit Court of
Appeals for the Ninth Circuit, to be holden at the
city of San Francisco, in the State of California,
within thirty (30) days from the date hereof, pursu-
ant to an order allowing an appeal, of record in the
clerk's office of the United States District Court for
the Northern Division of the Southern District of
California, wherein the United States of America is
appellant and California Midway Oil Company, As-
sociated Oil Company, Columbus Midway Oil

2 The United States of America vs.

Company, 32 Oil Company, L. B. McMurtiy,
J. M. McLeod, and Standard Oil Company
arc appellees, to show cause, if any there be, why the
decree rendered against the said appellant, as in the
said order allowing appeal mentioned, should not be
corrected and why speedy justice should not be done
to the parties in that behalf. [I*]

WITNESS the Honorable R. S. BEAN, United
States District Judge for the Southern District of
California, this 15th day of December, in the year
of our Lord one thousand nine hundred and nine-
teen and of the Independence of the United States of
America one hundred and forty-third.

R. S. BEAN,
District Judge. [II]
Service of the above citation is hereby accepted
this 22d day of December, A. D. 1919, for and on be-
half of the appellees, California Midway Oil Com-
pany, Associated Oil Company, Columbus Midway
Oil Company, 32 Oil Company, L. B. McMurtry,
J. M. McLeod, and Standard Oil Company.

HENRY ACH,
EDMUND TAUSZKY,
Solicitors for Associated Oil Company.
ROBERT M. PEASE,
Solicitor for J. M. McLeod and 32 Oil Company.

JORDAN & BRANN,
Solicitor for L. B. McMurtry.
GEORGE E. WHITAKER,
Solicitor for California Midway Oil Company.

*Page-number appearing at foot of page of original certified Transcript
of Record.

California Midway Oil Com pany el al. 3

PILLSBURY, MADISON & SUTRO,
Solicitors for Standard Oil Company.
IT. T. CLOTFELTER,
W.B.

Solicitor for Columbus Midway Oil Company. [Ill]

[Endorsed] : No. B-10. In the District Court of
the United States for the Southern District of Cali-
fornia, Northern Division. United States of
America, Plaintiff, vs. California Midway Oil Co.,
et al., Defendants. Citation on Appeal. Filed Jan
8, 1920. Chas. N. Williams, Clerk. By R. S. Zim-
merman, Deputy Clerk. [IV]

Names and Addresses of Attorneys of Record.
For Appellant:

HENRY F. MAY, Esq.,
E. B. LACY, Esq.,

Special Assistants to the Attorney General,
214 Post Office Building, San Fran-
cisco, Cal.

For Appellees :

HENRY ACH, Esq., San Francisco, Cal., Flat-
iron Bldg.,

EDMUND TAUSZKY, Esq., Sharon Bldg.,
San Francisco, Cal.,
For Associated Oil Company.

ROBERT M. PEASE, Esq., 519 Story Bldg.,
Los Angeles, Cal.,
For J. M. McLeod and 32 Oil Company.

The Un/ited States of America vs.

JORDAN & BRANN, Monadnock Bldg., San

Francisco, Cal.,

For L. B. McMurtry.
GEO. E. WHITAKER, Esq., Bakersfield, Cal.,

For California Midway Oil Company.
PILLSBURY, MADISON & SUTRO, Stand-
ard Oil Bldg., San Francisco, Cal.,

For Standard Oil Company.
U. T. CLOTFELTER, Esq., 436 Kirckhoff

Bldg.,Los Angeles, Cal,

For Columbus Midway Oil Company.

In the District Court of the United States for the
•Southern District of California, Northern Divi-
sion, Ninth Circuit.

IN EQUITY— No. B-10.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

CALIFORNIA MIDWAY OIL COMPANY, AS-
SOCIATED OIL COMPANY, COLUMBUS
MIDWAY OIL COMPANY, 32 OIL COM-
PANY, L. B. McMURTRY, J. M. McLEOD,
and STANDARD OIL COMPANY,

Defendants.

Amended Bill of Complaint.

To the Judges of the District Court of the United

States for the Southern District of California,

Sitting Within and for the Northern Division

of said District:

Comes now The United States of America, by

California Midway Oil Company et al. 5

Thomas W. Gregory its Attorney General, leave of
Court being first had and obtained, and presents this,
its amended bill in equity, against California Mid-
way Oil Company, Associated Oil Company, Colum-
bus Midway Oil Company, 32 Oil Company, L. B.
McMurtry, J. M. MeLeod, and Standard Oil Com-
pany (citizens and residents, respectively, as stated
[1] in the next succeeding paragraph of this bill),
and for cause of complaint alleges :

I.
Each of the defendants, California Midway Oil
Company, Associated Oil Company, Columbus Mid-
way Oil Company, 32 Oil Company, and Standard
Oil Company, now is, and at all the times hereinafter
mentioned as to it was, a corporation organized and
existing under the laws of the State of California.

The defendant, J. M. MeLeod, now is, and at all the
times hereinafter mentioned as to him was, a resi-
dent and citizen of the Southern District and State
of California.

The defendant, L. B. McMurtry, nowT is, and at
all the times hereinafter mentioned as to him was,
a resident and citizen of the Northern District and
State of California.

II.
For a long time prior to and on the 27th day of
September, 1909, and at all times since said date, the
plaintiff has been and now is the owner and entitled
to the possession of the following described petro-
leum, or mineral oil, and gas land, to wit :

The Northwest quarter (NW.y4) of Section
thirty-two (32), Township thirty-one (31)

6 The United States of America vs.

South, of Range twenty-three (23) East, Mount
Diablo Base and Meridian, and of the oil, petro-
leum, gas and all other minerals contained in
said land.

III.
On the 27th day of September, 1909, the President
of the United States, acting by and through the Sec-
retary of the Interior, and under the authority legally
invested in him so to do, duly and regularly with-
drew and reserved all of the land hereinbefore par-
ticularly described (together with other lands) from
mineral exploration, and from all forms of location,
settlement, selection, filing, entry, patent, occupation
or disposal, under [2] the mineral and nonmin-
eral land laws of the United States, and since said
last-named date none of said lands have been subject
to exploration for mineral oil, petroleum or gas, occu-
pation, or the initiation of any right under the pub-
lic land laws of the United States.

IV.
Notwithstanding the premises, and in violation of
the proprietary and other rights of the plaintiff, and
in violation of the laws of the United States, and in
disregard of, contrary to, and by infringement upon
the governmental policy adopted by the United
States for the protection, conservation, disposal and
use of the petroleum oil and gas contained in said
land, and in other lands belonging to the United
States, the said defendants, California Midway Oil
Company, Associated Oil Company, Columbus Mid-
way Oil Company, 32 Oil Company, L. B. McMurtry,
J. M. McLeod and Standard Oil Company, entered

California Midway Oil Company et al. 7

upon and took possession of the land hereinbefore
particularly described, for the purpose of prospect-
ing, exploring, drilling oil wells for, discovering, ex-
tracting, producing, converting and appropriating to
their own use petroleum oil and gas therefrom, and
did so prospect, and did continue so to prospect, ex-
tract, produce, explore, drill wells for, and discover,
extract, produce, convert, and appropriate to their
own use such oil and gas, long subsequent to the date
on which said land was withdrawn, as hereinbefore
mentioned, by said order of withdrawal of the 27th
of September, 1909.

None of said defendants, nor any other person or
corporation under whom or through wThom they
claim a right or interest in said land, nor any other
person, had discovered petroleum oil, gas or other
minerals on or in said land before said land was
withdrawn, as hereinbefore stated, by said order of
[3] withdrawal of the 27th of September, 1909, as
hereinbefore set forth.

VI.

None of the defendants, nor any other person, was,
at the time said land was withdrawn on the 27th
of September, 1909, as hereinbefore set forth, a bona
fide occupant or claimant of said land and in the dili-
gent prosecution of wTork leading to the discovery of
oil or gas thereon or therein, under a valid and sub-
sisting location under the mining laws of the United
States.

VII.

Long after said land had been withdrawn from

8 The United States of America vs.

prospecting exploration, and entry, as hereinbefore
mentioned, the defendants, California Midway Oil
Company, Associated Oil Company, Columbus Mid-
way Oil Company, 32 Oil Company, L. B. McMurtry,
and J. M. McLeod, drilled oil and gas wells on said
land for the extraction, production and appropria-
tion of petroleum oil and gas therefrom, and in vio-
lation of the proprietary rights of the plaintiff
therein, and in violation of the laws of the United
States, and of the proclamations and orders issued
by the President of the United States, and partic-
ularly in violation of said order of withdrawal of
September 27th, 1909, and in disregard of, contrary
to, and by infringement upon the general govern-
mental policy adopted and declared by the United
States for the protection, conservation, use and dis-
posal of petroleum oil and gas in the land herein-
before particularly described, and in other lands be-
longing to the United States, to the great and irre-
mediable damage of the plaintiff, and to the great
and irreparable injury of said land hereinbefore de-
scribed, and to the great and irreparable injury of
other lands belonging to the United States adjacent
to such described land, have extracted, produced,
converted and appropriated to [4] their own use,
from the land hereinbefore described, and other
lands adjacent thereto belonging to the United
States, large quantities of petroleum oil and gas,
the exact quantities of which petroleum oil and gas
so extracted, produced, converted and appropriated,
and the value thereof, this plaintiff is unable to
state; and said defendants, California Midway Oil

California Mid wan Oil Company et al. 9

Company, Associated Oil Company, Columbus Mid-
way Oil Company, 32 Oil Company, L. B. Mc-
Murtry, and J. M. McLeod, are now continuing so
to do, and are threatening to, and will hereafter con-
tinue so to do, to the further great and irreparable
injury of said land, and to the further great and
irremediable damage of this plaintiff, if they are not
prevented and restrained from so doing by the
proper orders of this Honorable Court.

VIII.
The said defendants, California Midway Oil
Company, Associated Oil Company, Columbus Mid-
way Oil Company, 32 Oil Company, L. B. McMur-
try, and J. M. McLeod, have drilled, maintained,
and operated oil and gas wells on said above-de-
scribed land, and have extracted and produced
petroleum oil and gas from such wells in an un-
skilled, negligent, careless and unworkmanlike
manner so as to cause the inflow of large, unneces-
sary and unreasonable quantities of water into such
wells, and into the oil sands and oil reservoirs in
which the petroleum oil and gas are contained in
such land, in such manner, and to such an extent,
and in such quantities as to cause such water to
infiltrate, saturate and impregnate such oil sands
and reservoirs, and the petroleum oil and gas
therein, to the great and irremediable damage of
this plaintiff, and to the great and irreparable in-
jury of said land, and the petroleum oil and gas
deposits therein; but as to the exact extent and
amount of such damage this plaintiff has no knowl-
edge, and cannot here state; and said defendants

10 The United States of America vs.

are now continuing so to do, and are [5] threat-
ening' to, and will hereafter continue so to do, to
the further great and irremediable damage of this
plaintiff, and to the further great and irreparable
injury of said land, and to the complete extermina-
tion and destruction of the petroleum oil and gas
deposits therein, if they are not prevented and re-
strained from so doing by the proper orders of this
Honorable Court.

IX.
Of the petroleum oil and gas heretofore ex-
tracted, appropriated, converted and produced in
the manner and for the purposes stated in para-
graph VII of this bill, large quantities have been
used, consumed and wasted by the said defendants,
California Midway Oil Company, Associated Oil
Company, Columbus Midway Oil Company, 32 Oil
Company, L, B. McMurtry, and J. M. McLeod and
other large quantities have been sold and delivered
by the defendants, California Midway Oil Com-
pany, Associated Oil Company, Columbus Midway
Oil Company, 32 Oil Company, L. B. McMurtry,
and J. M. McLeod, to the defendant, Standard Oil
Company, and other large quantities have been sold
and delivered to other persons and corporations
whose names are to this plaintiff unknown, and
cannot for that reason be here stated, but as to the
exact quantities of petroleum oil and gas so con-
verted, appropriated, used, consumed, sold and de-
livered, and as to the value thereof, and as to the
prices received for such quantities thereof as have
been sold and delivered, this plaintiff is unable to

California Midway Oil Company et al. 11

state, and because it has no knowledge thereof and
has no means of ascertaining the facts in relation
thereto except from defendants herein, therefore
a full and complete discovery from said defendants
in relation thereto is sought herein.

X. [6]
Each and all of the defendants herein claims
some right, title or interest in said land, or in some
part thereof, or in the petroleum oil or gas therein,
or extracted therefrom, or by or through the pur-
chase thereof, and each of which claims is predi-
cated upon or claimed directly or mediately
through or under a pretended mining location un-
der the style of " Montana Placer Mining Claim,"
which said location purported and falsely pre-
tended to have been on and for the land herein spe-
cifically described, on the 1st day of January, 1909,
by and in the names of, and for the exclusive use
and sole benefit of H. E. Bashore, R. B. Welch,
W. A. Keenan, William Mahr, Herbert M. Walker,
Eugene Metz, P. EL Romaine, Jr., and C. Rupert
Walker (whose Christian names except as here
stated are unknowrn to, and cannot be here further
stated by this plaintiff) as a pretended association of
eight persons acting as locators and under and
through a pretended notice of such pretended loca-
tion, wThich at the request and through the unau-
thorized and fraudulent procurement of one L. B.
McMurtry (whose Christian name is unknown to and
cannot be here stated by this plaintiff), spread upon
the mining records of the county in wrhich said land
is located, on the 5th day of January, 1909.

12 The United States of America vs.

That none of said defendants has acquired, or
could acquire, and cannot now rightfully and law-
fully assert any right, title or interest in and to the
said laud, or in and to the petroleum oil or gas
therein, or in or to any of the petroleum oil or gas
heretofore extracted and produced therefrom under
and by reason of said pretended location or said pre-
tended notice thereof, for the reason that said pre-
tended location and pretended notice thereof were
unlawful, fraudulent, invalid, and have no effect
either in law or in equity, because said pretended
location was not made and said pretended notice
was not caused to be recorded by said pretended
locators or by [7] any of them acting in their
own proper persons, or through or by any person
duly authorized so to do by them, and the said pre-
tended location was not made and the said pre-
tended notice was not recorded in the interest of
or for the benefit and use of said pretended locators,
or any of them, either individually or as an associa-
tion, but said pretended location was in truth and
in fact made, and the said pretended notice was in
truth and in fact caused to be spread upon the said
mining records by said L. B. McMurtry, under and
through mesne conveyances from whom the said
defendants now assert said claims, unlawfully,
fraudulently, secretly, and without the knowledge
and consent, direction, sanction or subsequent rati-
fication of said pretended locators, or any of them,
for the exclusive use and benefit and in the sole in-
terest of the said L. B. McMurtry, or some other
person than said persons whose names were so used,
and with and for the sole and only purpose and in-

California Midway Oil Company et al. 13

tent by such device, fraud, and concealmenl to se-
cure to said L, I>. McMurtry, and his assigns, or to

sotuc other person than such persons whoso names
were so used unlawfully and in violation of, and in
fraud of the rights of this plaintiff, and in violation of
Section 2331 of the Revised Statutes of the United
States and the other laws of the United States, a
greater area of mineral land than it was lawful at the
date of such pretended location, or at the present
time, to be embraced in a single location by the said
L. B. McMurtry, or by any one individual person
or corporation, or by an association of persons com-
posed of a less number than eight persons, severally
qualified to make a mining location.

Except as in this bill stated, the plaintiff has no
other knowledge or information concerning the na-
ture of any other claims asserted by the defendants
herein, or any of them, and therefore leaves said
defendants to set forth their respective [8] claims
and interests.

In that behalf plaintiff alleges, because of the
premises of this bill, that none of the defendants
has ever had or now has any right, title or interest
in or to, or any lien upon, said land, or any part
thereof, or any right, title or interest in or to the
petroleum, mineral oil, or gas deposited therein, or
any right to extract petroleum, gas or other min-
erals from said land, or to convert or dispose of the
petroleum oil or gas so extracted, or any part
thereof; on the contrary, the acts of these defend-
ants who have entered upon said land and drilled oil

14 The United States of America vs.

and gas wells thereon and used and appropriated
the petroleum oil and gas deposited therein, and
assumed to sell and convey any interest in or to any
part of said land, or any part of the petroleum oil
or gas extracted therefrom, were all in violation of
the laws of the United States and of the aforesaid
order of withdrawal, and all of said acts are in
violation of the rights of the plaintiff herein, and
such acts interfere wdth the execution by the plain-
tiff of its public policies with respect to said land
and the petroleum oil and gas therein, as herein-
before set forth.

XII.

The present value of the land hereinbefore de-
scribed exceeds Four Hundred Thousand Dollars
($400,000.00).

In consideration of the premises thus exhibited,
and inasmuch as plaintiff herein is without full and
adequate remedy in the premises save in a court of
equity, where matters of this nature are properly
cognizable and relievable, plaintiff prays :

1. That the said defendants, and each of them,
may be required to make full, true and direct an-
swer, respectively, to all and singular the matters
and things hereinbefore stated and charged, and to
fully disclose and state their claims to said [9]
land hereinbefore described, and to any and all parts
thereof, as fully and particularly as if they had been
particularly interrogated thereunto, but not under
oath, answer under oath being hereby expressly
waived.

2. That the said land may be declared by this

California Midway Oil Company et al. 15

Court to have been at all times from and after the
27th of September, 1901), lawfully withdrawn from
mineral exploration, and from all forms of location,
settlement, selection, filing, entry, or disposal under
the mineral and nonmineral public land laws of the
United States ; and that the said location notice was
fraudulently tiled, and the said defendants did not
acquire any rights thereunder.

3. That said defendants, and each of them, may
be adjudged and decreed to have no estate, right,
title, interest or claim in or to said land, or any part
thereof, or in or to any mineral or mineral deposits
contained in or under said land, or any part thereof;
and that all and singular of said land, together with
all of the minerals and mineral deposits, including
mineral oil, petroleum and gas therein or thereunder
contained, may be adjudged and decreed to be the
perfect property of this plaintiff, free and clear of
the claims of said defendants, and each and every
one of them.

4. That each and all of the defendants herein,
their officers, agents, servants and attorneys, during
the progress of this suit, and thereafter, finally and
perpetually, may be enjoined from asserting or
claiming any right, title, interest, claim or lien in
or to the said land, or any part thereof, or in or
to any of the minerals, or mineral deposits therein,
or thereunder contained; and that each and all of
the defendants herein, their officers, agents, servants
and attorneys, during the progress of this suit,
and thereafter, finally and perpetually may be en-
joined from going upon any part or portion of said

16 The United States of America vs.

land, and [10] from in any manner using any of
said land and premises, and from in any manner
extract in-, removing or using any of the minerals
deposited in or under said land and premises, or
any part or portion thereof, or any of the other
natural products thereof, and from in any manner
committing any trespass or waste upon any of said
land or with reference to any of the other natural
products thereof.

5. That an accounting may be had by said de-
fendants and each and every one of them, wherein
said defendants, and each and every one of them,
shall make a full, complete, itemized and correct
disclosure of the quantity of minerals (and particu-
larly gas and petroleum) removed or extracted, or
received by them, or either of them, from said land,
or any part thereof, and of any and all moneys
or other property, or thing of value received from
the sale or disposition of any and all minerals ex-
tracted from said land, or any part thereof, and
of all rents and profits received under any sale,
lease, transfer, conveyance, contract or agreement
concerning said land, or any part thereof ; and that
the plaintiff may recover from said defendants,
respectively, all damages sustained by the plaintiff
in these premises.

6. That a receiver may be appointed by this
Court to take possession of said land and of all
wells, derricks, drills, pumps, storage vats, pipes,
pipe-lines, shops, houses, machinery, tools and ap-
pliances of every character whatsoever thereon,
belonging to or in the possession of said defend-

California Midway Oil Company et al. 17

ants, or any of them, which have been used or now
are being used in the extract ion, storage, transpor-
tation, refining, sale, manufacture, or in any other
manner in the production of gas, petroleum or pe-
troleum products or other minerals from said land,
or any part thereof, for the purpose of continuing,
and with full power and authority to continue the
operations on said land in [11] the production
and sale of gas, petroleum and other minerals where
such course is necessary to protect the property of
the plaintiff against injury and waste, and for the
preservation, protection and use of the oil and gas
in said land, and the wells, derricks, pumps, tanks,
storage vats, pipes, pipe-lines, houses, shops, tools,
machinery and appliances being used by the defend-
ants, their officers, agents, or assigns in the pro-
duction, transportation, manufacture or sale of gas,
petroleum or other minerals from said land, or any
part thereof, and that such receiver may have the
usual and general powers vested in receivers of
courts of chancery.

7. That the plaintiff may have such other and
further relief as in equity may seem just and
proper.

To the end, therefore, that this plaintiff may
obtain the relief to which it is justly entitled in the
premises, may it please your Honors to grant unto
the plaintiff a writ or writs of subpoena, issued
by and under the seal of this Honorable Court,
directed to said defendants herein, to wit : California
Midway Oil Company, Associated Oil Company,
Columbus Midway Oil Company, 32 Oil Company,

18 The United States of America vs.

L. B. McMurtry, J. M. McLeod, and Standard Oil
Company, therein and thereby commanding them,
and each of them, at a certain time, and under
a certain penalty therein to be named, to be and
appear before this Honorable Court, and then and
there, severally, full, true and direct answer make
to all and singular the premises, but not under
oath, answer under oath being hereby expressly
waived, and stand to perform and abide by such
order, direction and decree as may be made against
them, or any of them, in the premises, and as shall
be meet and agreeable to equity. [12]

THOMAS W. GREGORY,
Attorney General of the United States.
ALBERT SCHOONOVER,
United States District Attorney.
E. J. JUSTICE,

Special Assistant to Attorney General.
A. E. CAMPBELL,

Special Assistant to Attorney General.
FRANK HALL,

Special Assistant to Attorney General. [13]

United States of America,
Northern District of California,
State of California, — ss.

George Hayworth, being first duly sworn, de-
poses and says:

He is now and has been since the 1st day of
February, 1914, Chief of Field Division of the Gen-
eral Land Office at San Francisco, California, and
prior to that time was, since July, 1910, a Special
Agent of the General Land Office, doing field work

California Midway Oil Com pan// et (d. 19

in California, and much of said work lias been
done in the investigation of facts relating to the
lands withdrawn by the President as oil lands, and
especially the lands withdrawn by order of Sep-
tember 27th, 1909, and by the order of July 2d,
1910.

That from examination of such land, or the facts
in relation thereto, obtained by him or by special
agents acting under his direction as such chief of
Field Division, and from examinations of the rec-
ords of the General Land Office, and the local land
offices of plaintiff in said State of California, he is
informed as to the matters and things as stated in
the complaint with reference to the particular lands
therein described; and the matters therein stated
are true, except as to such matters as are alleged
upon information and belief, and as to those, affiant
after investigation, states that he believes them to
be true.

GEO. HAYWORTH.

Subscribed and sworn to before me this 2d day
of March, 1917.

[Seal] J. L. BALDWIN,

Deputy Clerk U. S. District Court, Northern Dis-
trict of California. [14]

[Endorsed] : In Equity— No. B^-10. In the Dis-
trict Court of the United States for the Southern
District of Calif., Northern Division. United
States of America, Plaintiff, vs. California Midway
Oil Co. et al., Defendants. Amended Bill of Com-
plaint. Filed Mar. 5, 1917. Wm. M. Van Dyke,

20 The United States of America vs.

Clerk. By R. S. Zimmerman, Deputy Clerk. E. J.
Justice, A. E. Campbell, and Prank Hall, Attorneys
for Plaintiff. [15]

In the District Court of the United States for the
Southern District of California, Northern Divi-
sion, Ninth Circuit.

IN EQUITY— No. B-10.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

CALIFORNIA MIDWAY OIL COMPANY, AS-
SOCIATED OIL COMPANY, COLUMBUS
MIDWAY OIL COMPANY, 32 OIL COM-
PANY, J. M. McLEOD and STANDARD
OIL COMPANY,

Defendants.

Answer of California Midway Oil Company.

Comes now defendant California Midway Oil
Company, and severing from its codefendants, an-
swers the purported bill in equity of the plaintiff
herein as follows:

This defendant alleges that the said purported
bill in equity does not state facts sufficient to en-
title plaintiff to the relief sought in and by its said
bill, nor facts sufficient to give this Court jurisdic-
tion in equity of plaintiff's claim therein urged; but
to the contrary, the facts alleged in said bill, if
sufficient to state a cause of action at all against

California Midway Oil Company et ol. 21

this defendant, states a cause of action at law and
in ejectment whereby plaintiff seeks to recover the

possession of the real property mentiond in para-
graph II of said hill, with the mesne profits thereof.

II.
This defendant denies that either on September
27th, 1909, or at any time since said date, or at any
time subsequent [16] to on or about January
1st, 1909, plaintiff has been entitled to the posses-
sion of the land described in paragraph II of its
bill, or to the possession of any of the oil, or petro-
leum, or gas, or other minerals contained in said
land; and defendant denies that at any of said
times plaintiff has been or now is the owner of
any of the oil, petroleum, gas or other minerals
contained in said land, or the owner of said land
at all, otherwise than subject to the right of pos-
session of said land and the right to extract and
remove all minerals therein of H. E. Bashore, R. B.
Welch, W. A. Keenan, William Mahr, Herbert M.
Walker, Eugene Metz, F. H. Romaine, Jr., and C.
Rupert Walker all of whom at the time of entry
and location hereinafter mentioned were duly qual-
ified persons, entitled to locate mineral claims upon
the public domain of the United States, and who
on or about January 1st, 1909, lawfully and peace-
ably entered in and upon said land under and by
virtue of the mineral laws of the United States, and
pursuant to the invitation extended to them so to
do by said laws, and took possession thereof, for
the purpose of prospecting said land and the dis-
covery of valuable mineral deposits thereon and

22 The United States of America vs.

therein, and who did January 1st, 1909, validly
locate said land under and pursuant to the pro-
visions of the said mineral laws of the United
States, as a placer mining claim, named " Montana
Placer Mining Claim," for the purpose of develop-
ing petroleum, gypsum, and other minerals therein
and thereon, and subject to the right of certain
of the defendants herein, lawfully acquired by said
defendants respectively from and under said
locators.

III.
This defendant denies that on the 27th day of
September, 1909, the President of the United
States, wThether acting by or through the Secretary
of the Interior, or acting otherwise, or under any
authority legally invested in him so to do, either
duly or regularly withdrew or reserved any of the
land described in [17] the said bill, either from
mineral exploration or from all or any forms or
form of location, settlement, selection, filing, entry,
patent, occupation or disposal, under the mineral or
nonruineral land laws of the United States or that
since last-named date said land or any portion
thereof has not been subject to exploration for
mineral oil, petroleum or gas, or to occupation, or
to the initiation or maintenance of any right under
the public land laws of the United States. But to
the contrary, this defendant alleges that on Sep-
tember 27th, 1909, and at all times since said
date, the said land and the whole thereof was and
has been in the lawful possession of the locators
thereof named in paragraph II of this ansfwer, and

California Midway Oil Company et al. 23

of the various persons lawfully claiming under and
in the right of said locators, and has been open
as to all said persons to mineral exploration, loca-
tion, occupation and disposal under the mineral
laws of the United States, to the maintenance of
the rights of said locators under said mineral laws,
and of the rights of persons claiming under said
locators: all of which rights of said locators were
lawfully acquired by virtue of said location prior
to said 27th day of September, 1909.

This defendant alleges that the withdrawal order
of September 27th, 1909, mentioned and referred to
in plaintiff's bill, with the exception of the descrip-
tion of the lands purported to be affected thereby,
is in the wTords and figures following, to wit :

' ' TEMPORARY PETROLEUM WITH-
DRAWAL No. 5.
In aid of proposes legislation affecting the
use and disposition of the petroleum deposits
on the public domain, all public lands in the
accompanying lists are hereby temporarily with-
drawn from all forms of location, settlement,
selection, filing, entry, or disposal under the
mineral or nonmineral public land laws. All
locations or claims existing and valid on this
date may proceed to entry in the usual manner
after field investigation and examination";
and that on September 27th, 1909, and prior to said
date, this defendant, California Midway Oil Com-
pany, was actually in the possession and occupation
of the real property described in plaintiff's [18]
bill of complaint, and was engaged therein and

24 The United States of America vs.

thereon in the diligent prosecution of work leading
to the discovery of oil and gas thereon; that such
occupation and work on the part of this defendant
was had and carried on under and by virtue of
rights acquired by this defendant from and through
said locators of said " Montana Placer Mining
Claim"; that said " Montana Placer Mining Claim"
was, at the date of said withdrawal order, had
been theretofore, wras at all times thereafter, and
now is, an existing and valid location and claim,
and as such not affected by the said withdrawal
order under and by virtue of its own terms.

This defendant denies that, in violation either of
the proprietary rights of plaintiff, or of any other
rights of plaintiff, or in violation of any law of
the United States, or any lawful order or lawful
proclamation of the President of the United States,
or in violation of any alleged order of withdrawal
of the President of the United States, made Sep-
tember 27th, 1909, or at any other date, or in dis-
regard of or contrary to, or by infringement upon
the governmental policy adopted by the United
States for the protection, conservation, disposal
and use of the petroleum, oil and gas contained in
said land, the said defendants California Midway
Oil Company, Associated Oil Company, Columbus
Midway Oil Company, 32 Oil Company, J. M.
McLeod, and Standard Oil Company, or either
or any of said defendants entered upon said
land described in plaintiff's bill, at any time
for the purpose of prospecting or exploring
said land for petroleum or for gas or for

California Midway Oil Company et al, 25

any other purpose; and this defendant further
denies that said defendants, or either or any of
said defendants, or the predecessors in interest of
said defendants, entered upon said land or any
portion thereof subsequent to September 27th,
1909, for any purpose whatever.

Admits that this defendant, subsequent to Sep-
tember 27th, 1909, extracted, produced and con-
verted to its own use certain [19] oil and gas
wThich had been discovered by it on and in said
described land prior to September 27th, 1909, and
this defendant alleges that it had the right so to do.

IV.

This defendant denies that it and the afore-
mentioned locators of the " Montana Placer Mining
Claim' ' had not discovered minerals open to dis-
covery and location under the mineral laws of the
United States on said land prior to September 27th,
1909, and denies that this defendant had acquired
no rights on or with respect to said land on or prior
to said date. This defendant for answer further
alleges that prior to the said 27th day of Sep-
tember, 1909, this defendant, California MidwTay
Oil Company, had acquired said rights to said land
under, through and from said locators of said
"Montana Placer Mining Claim"; that prior to
said 27th day of September, 1909, this defendant,
California Midway Oil Company, had been, and on
said date was in the actual and diligent prosecution
on said land of work leading to the discovery of
oil and gas thereon, and was on said date a bona
-fide occupant and claimant of said land, and in the

26 The United States of America vs.

diligent prosecution of the work aforesaid, and
thereafter continued in the prosecution of such
work to the discovery and production of oil and
gas on said land.

Denies that at any time after said land had been
withdrawn from prospecting, exploration or entry,
the defendants California Midway Oil Company,
Associated Oil Company, Columbus Midway Oil
Company, 32 Oil Company, and J. M. McLeod,
or either or any of said defendants drilled oil or
gas wells on said land for the extraction, produc-
tion, conversion, or appropriation of petroleum, oil
and gas therefrom, in violation of the proprietary
rights of the plaintiff therein, or in violation of
the laws of the United States, or of any proclama-
tion or order issued [20] by the President of
the United States, or particularly in violation of
said order of withdrawal of September 27th, 1909.

Denies that this defendant at any time in dis-
regard of, or contrary to, or by infringement upon
the general governmental policies adopted and de-
clared by the United States for the protection,
conservation, use and disposal of petroleum, oil and
gas in the land hereinbefore particularly described,
and in other lands belonging to the United States,
to the great and irremediable damage of the plain-
tiff, or to the great and irreparable injury of said
land hereinbefore described, or to the great and
irreparable injury of other lands belonging to the
United States adjacent to said described land, has
extracted, produced, converted or appropriated to

California Midway Oil Company et at. 27

its own use from the land hereinbefore described,
or other lands adjacent thereto belonging to the
United States, large or any quantities of petroleum,
oil or gas, and this defendant further alleges that
plaintiff neither has nor lawfully can have any
policies with respect either to the conservation, or
to the use, or to the disposition of said land, or
of the petroleum, or oil, or gas contained therein,
for the reason that, pursuant to the policies long
declared by the Congress of the United States with
respect to the public mineral lands of the United
States and the disposition thereof, as declared by
the acts of Congress relating thereto, the said
locators of the said " Montana Placer Mining
Claim" had lawfully located the said land and
the whole thereof, prior to said alleged withdrawal
order, and to any alleged change in said policies,
and that said defendants California Midway Oil
Company, Associated Oil Company, Columbus
Midway Oil Company, 32 Oil Company, J. M.
McLeod, and Standard Oil Company, are each
lawfully in the possession of portions of said land,
claiming under and by virtue of said location.

The defendant denies that defendants California
MidwTay Oil [21] Company, Associated Oil Com-
pany, Columbus Midway Oil Company, 32 Oil
Company, J. M. McLeod, and Standard Oil Com-
pany, or either or any of them are in any wise
trespassing upon said land, or that either petro-
leum, oil or gas will be wrongfully taken by said
named defendants, or either or any of them there-
from, or that said defendants, or either or any of

28 The United States of Aw erica vs.

tli cm will commit trespass or waste upon said land,
to the irreparable or any injury of said land, or
to the great or any damage to plaintiff.

VI.

Admits that this defendant California Midway
Oil Company has drilled, maintained and operated
oil and gas wells on said above-described land, but
this defendant denies that it has extracted and
produced, or extracted or produced petroleum, oil
or gas from any of said wells in an unskilled, or
negligent, or careless or unworkmanlike manner,
so as to cause the inflow of large or unnecessary
or unreasonable quantities of water into said wTell
or wells, or into the oil sands, or oil reservoirs,
in wThich petroleum, oil and gas are contained in
said land, in such manner, or to such an extent,
or in such quantities as to cause such water to
infiltrate or saturate or impregnate any of said oil
sands or reservoirs, or the petroleum or oil or gas
therein, to the great or any damage of plaintiff,
or to the great or irreparable or any injury of said
land, or to the petroleum, or oil or gas deposits
therein.

Denies that this defendant is nowT continuing so
to do, or is threatening to or will at any time here-
after continue so to do, to the further great and
irremediable or any damage to plaintiff, or to the
further great or irreparable or any injury to said
land, or to the complete or any extermination or
destruction of the petroleum or oil or gas deposits
therein.

California Midway Oil Company et nl. 29

TO.

This defendant admits thai of the oil produced
from [22] wells drilled by it on the said de-
scribed land, certain quantities of the same haw
been used by it upon said laud for fuel purposes,

and the remainder sold, hut this defendant alleges
that no petroleum or oil or gas whatever has been
wasted by it in its operations.

VIII.

Denies that each or any of the claims of the
defendants herein, or either or any of them, is
predicated upon or claimed directly or mediately
through or under any pretended mining location,
under the style of "Montana Placer Mining Claim"
or any other style.

It is not true that said location purported and
falsely pretended to have been on and for the land
herein specifically described, on the 1st day of Jan-
uary, 1909, by and in the names of and for the
exclusive use and sole benefit of H. E. Bashore,
R. B. Welch, W. A. Keenan, William Mahr,
Herbert M. Walker, Eugene Metz, F. H. Romaine,
Jr., and C. Rupert Walker, as a pretended associa-
tion of eight persons acting as locators, or under
or through a pretended notice of such pretended
location, which was, at the request or through the
unauthorized and fraudulent procurement of one
L. B. McMurtry, spread upon the mining records
of the county in which said land is located, on the
5th day of January, 1909.

It is not true that not any of said defendants
have acquired or could acquire, or cannot now law-

30 The United States of America vs.

fully or rightfully assert any right, title or interest
in and to the said land, or in and to the petroleum,
oil or gas therein, or in or to any of the petroleum,
oil or gas heretofore extracted or now being ex-
tracted, or which shall hereafter be extracted and
produced therefrom under and by reason of the
location of said " Montana Placer Mining Claim"
or the notice thereof.

It is not true that said location and the notice
thereof [23] were unlawful, or fraudulent or
invalid, or have no effect either in law or in equity.
It is not true that said location was not made and
said notice was not caused to be recorded by such
locators, or by any of them, acting in their own
proper persons, or through or by any person duly
authorized so to do by them.

It is not true that the said location was not made
and the said notice not recorded in the interest of,
or for the benefit or use of such locators, or anv
of them, either individually or as an association.

It is not true that such location was in truth and
in fact made, and said notice in truth and in fact
caused to be spread upon the said mining records
by said L. B. McMurtry unlawfully or fraudulently
or secretly, or without the knowledge, or consent,
or direction, or sanction, or subsequent ratification
of said locators, or any of them, for the exclusive
use and benefit, and in the sole interest of said
L. B. McMurtry, or some other person than said
persons whose names appear on said location
notice, or with or for the sole and only purpose
and intent, by device, or fraud or concealment to

California Midway Oil Company et al. 31

secure to the said L. B. McMurtry and his assigns,
or to some other person than such persons whose
names appear on said location notice, in violation
and in fraud of the laws of the plaintiff, or in
violation of section 2331 of the Revised Statutes
of the United States, and the other laws of the
United States, a greater area of mineral land than
it was lawful at the date of said location, or at the
present time, to be embraced in a single location,
by the said L. B. McMurtry, or by any one indi-
vidual person or corporation, or by an association
of persons composed of a less number than eight
severally qualified to make a mining location.

It is not true that this defendant asserts any
claim of title to said land or any portion thereof
deraigned or [24] through mesne conveyances
from said L. B. McMurtry, but, on the contrary,
this defendant alleges that it asserts title to a por-
tion of said described land deraigned and by mesne
conveyances from the said locators thereof, to wit,
H. E. Bashore, If. B. Welch, W. A. Keenan,
William Mahr, Herbert M. Walker, Eugene Metz,
F. H. Romaine, Jr., and C. Rupert Walker.

IX.

It is not true that because of the premises of
said bill of complaint, this defendant has never
had, or has not now, any right, title or interest in
or to, or any lien upon said land or any part
thereof, or any right, title or interest in or to the
petroleum, mineral oil or gas deposited therein,
or any right to extract petroleum, gas or other
minerals from said land, or to convert or dispose

32 The United States of America vs.

of the petroleum or oil or gas so extracted, or any
part thereof.

It is not true that any act of this defendant in
connection with said land, either in the drilling of
oil or gas wells thereon, or the use or appropria-
tion of the petroleum, oil or gas deposited therein,
or the assumption to sell or convey any interest
in or to any part of said land, or any part of the
petroleum, oil or gas extracted therefrom, was or
is in violation of any law of the United States,
or of the aforesaid order of withdrawal.

It is not true that any act of this defendant in
connection with said land has been or is in violation
of the rights of the plaintiff herein. It is not true
that any such act or acts interfere with the execu-
tion by the plaintiff of its public policies or policy
with respect to said land, or petroleum, oil or gas
therein.

This defendant further alleges that at all times
on or since September 27th, 1909, plaintiff has had
both notice and [25] knowledge, and has been
fully aware that this defendant was in possession
of a portion of said land, and was at large expense
engaged in the prosecution of drilling for oil and
producing oil therefrom. That for more than
seven years immediately prior to the bringing of
this action, plaintiff has had both notice and knowl-
edge, and has been fully aware that this defendant
w^as in possession of a portion of said land, and
drilling thereon for the production of oil there-
from, and producing oil therefrom. That plaintiff

California Mid/ray Oil Company et al. 33

has wilfully and purposely lain by and made no
objection whatever to the operations on said land
of any of the defendants named herein, and has
purposely suffered said defendants to expend large
sums of money in the development of said land,
for the production of oil therefrom, without in any-
wise objecting to said possession, or indicating to
any of said defendants that plaintiff claimed that
the possession of said land was in anywise contrary
to law, or in violation of any rights of plaintiff;
that said defendants relied on said acquiescence on
plaintiff's part, and expended said moneys in re-
liance thereon, and this defendant alleges that this
plaintiff is and ought to be thereby estopped from
maintaining this action.

X.
That by the Act of Congress of the United States
of February 11th, 1897, chapter 216, said Congress of
the United States declared that all the public lands
of the United States, containing petroleum or other
mineral oils, and chiefly valuable therefor, were free
and open to occupation, exploration and purchase by
citizens of the United States and those who had de-
clared their intention so to be ; and that thereby the
Congress of the United States extended to its citizens
and to those persons who had declared their inten-
tion of becoming such citizens, an invitation to enter
upon said public lands, to occupy and explore the
same, and in the event of such occupation and ex-
ploration [26] demonstrating that said lands were
chiefly valuable for petroleum or other mineral oils,
to purchase said lands, as provided in and by the laws

34 The United States of America vs.

of the United States and the regulations of the De-
partment of the Interior and the General Land Office
of the United States prescribed pursuant to law.
That, relying upon said invitation and on or about
January 1st, 1909, the aforesaid locators of said
" Montana Placer Mining Claim" believing that the
londs described in plaintiff's bill contained petro-
leum or other mineral oils and were chiefly valuable
therefor, entered upon and occupied said lands and
entered upon the exploration thereof for the purpose
of determining wThether the said belief on their part
wTas well founded ; that said locators made the loca-
tion of said " Montana Placer Mining Claim' ' as
hereinbefore alleged; that the defendants California
Midway Oil Company, Associated Oil Company,
Columbus Midway Oil Company, 32 Oil Company,
and J. M. McLeod claim said land, or some title
thereto or interest therein, under and by virtue of
said location, and all of said claims are derived,
mediately or immediately, from and through said
locators; that relying upon said invitation of the
Congress of the United States, and prior to Septem-
ber 27, 1909, this defendant expended in improve-
ments on the said land, which improvements were
necessary for the exploration thereof for the dis-
covery of petroleum or other mineral oils, a sum in
excess of twrenty thousand dollars, and this defend-
ant California Midway Oil Company has expended
as the purchase price for the sixty acres claimed by
it in said northwest quarter of section 32, towTnship
31 south, of range 23 east, M. D. M., the sum of sixty
thousand dollars, and has expended in the explora-

California Midway Oil Company ct al. 35

tion of said described portion of land and in the drill-
ing of wells thereon for the discovery and production
of petroleum, oil therefrom, a sum aggregating one
hundred and thirty thousand dollars, making a total
expenditure by this defendant of one hundred and
[27] ninety thousand dollars; that all of said ex-
penditures were made on the faith of and in reliance
upon the said invitation of Congress extended in and
by the said Act of February 11, 1897 ; that thereby
plaintiff is and ought to be estopped from maintain-
ing this action.

XI.
That for more than seven years prior to the bring-
ing of this action, the defendants California Midway
Oil Company, Associated Oil Company, Columbus
Midway Oil Company, 32 Oil Company, and J. M.
McLeod have been in the lawful and peaceable pos-
session of all of the land described in plaintiff's bill,
and continuously working the same as a mining claim
under, by virtue of and in the right of the said " Mon-
tana Placer Mining Claim" location, without objec-
tion, let or hindrance on the part of plaintiff; that
during all of said seven year period, plaintiff has
been fully informed and has known of said occupa-
tion and working of said land by said defendants;
that said plaintiff was on the 27th day of September,
1909, fully familiar with and cognizant of the con-
dition of said land and all operations thereon look-
ing to the development and discovery of oil and other
minerals therein; and that from on or about Jan-
uary 1st, 1910, and while drilling and other opera-
tions involving an extensive outlay of money on said

36 The United States of America vs.

land were in progress, various officers and agents of
plaintiff, whose duty it was to examine and inspect
said land, visited the same, and particularly visited
and inspected the wTork then in progress by this de-
fendant ; and that at no time prior to the filing of the
bill of complaint in this action did said officers or
agents of the plaintiff, or either or any of them object
to or in any manner protest against the operations
being carried on by this defendant. That through-
out all of said time it was the fact, and said officers
and agents of said plaintiff knew7 it to be the fact,
that if in the course of said operations, and as a re-
sult of the [28] expenditures being made in pur-
suance thereof as aforesaid, oil wras discovered, the
same would be brought to the surface and disposed
of in the ordinary course of trade. That among the
officers of the United States who so visited the said
land during the time as aforesaid, and wTere cogni-
zant of and familiar with all of the facts with refer-
ence thereto as aforesaid, and particularly with ref-
erence to the operations thereon and expenditures
being made in pursuance thereof as aforesaid, were
the Assistant Secretary of the Interior of the United
States, the Commissioner of the General Land Office
of the United States, the chief of the Field Division
of the General Land Office of the United States, and
various and sundry special agents of the Field Ser-
vice of the General Land Office of the United States.
That each, every and all of said officers and agents of
the plaintiff who visited said land as aforesaid, did,
as this defendant is informed and believes, and there-
fore alleges the fact to be, make written report to

California Midway Oil Company et al. 37

the Department of the Interior of the United States
with reference to the condition of said land and the
operations thereon, from time to time, during the
course of said visits, and, as this defendant is in-
formed and believes and therefore alleges the fact to
be, said Chief of the Field Division of the General
Land Office, and Special Agents of said Field Ser-
vice of the General Land Office, especially inquired
of their superior officers, to wit, the Secretary of the
Interior and the Commissioner of the General Land
Office as to whether any objection should be made to
said operations on said land and the expenditures
being made pursuant thereto, and that said Chief
it Field Division and Special Agents were instructed
not to make any objection or protests against said
operations, and that no protest or objection was ever
made, but, on the contrary, said officers, by their acts
and conversations upon the ground, approved of said
operations, and this defendant believes honestly
[29] and in good faith, that said operations met
with the approval of said officers.

That as this defendant is informed and believes,
and therefore alleges the fact to be, said officers and
agents of the plaintiff, at the times of their visits to
said land when production of oil wTas in progress
thereon, obtained and secured correct and accurate
data with reference to the quantity of oil produced,
the persons to whom the same was sold, and the
amount received therefor, and, as this defendant is
informed and believes, and therefore alleges the fact
to be, said plaintiff is now, was at the time of the
filing of the complaint herein, and at all times has

38 The United States of America vs.

been, in full possession of all the facts with refer-
ence to the production of oil from said land and the
disposition thereof, and the price received therefor.
That by reason of the facts alleged in this paragraph
plaintiff is, and ought to be, estopped from maintain-
ing this action.

XII.

That, as this defendant is informed and be-
lieves, and therefore alleges the fact to be,
defendants California Midway Oil Company,
Associated Oil Company, Columbus Midway
Oil Company, 32 Oil Company, and J. M.
McLeod, and each of said defendants at the
various times required by law, made report and re-
turn to the plaintiff as to their respective incomes for
the years 1910, 1911, 1912, 1913, 1914, 1915 and 1916
and that in and by said reports and returns there
wTas included all proceeds received by them respec-
tively from sales of oil produced from the land de-
scribed in plaintiffs bill; that plaintiff knew that
such returns included the said proceeds of sale ; that
with such knowledge on the part of plaintiff, plain-
tiff levied and assessed income taxes against each of
said defendants upon their respective incomes for
the said years, including the income received by each
of said defendants from said sales of oil produced
from said land described in plaintiff's bill, and that
said defendants respectively [30] paid plaintiff
said taxes, which were received by plaintiff with the
knowledge on its part above alleged ; that each of said
defendants paid plaintiff the said taxes, relying upon
plaintiff's acquiescence and acknowledgment, as

California Midway Oil Company et al. 39

shown by its assessment of said taxes against said
defendants, in the legality of said defendants' pos-
session and occupation of said land, and the legality
of said defendants' title to the oil extracted there-
from; that had not said defendants been induced
thereto by plaintiff's acceptance of said reports and
returns, and its imposition of taxes upon said pro-
ceeds of oil sales as evidencing plaintiff's acquies-
cence in the legality of said defendants' occupation
of said land and title to the oil extracted therefrom,
said defendants would not have paid said taxes ; and
by reason of such reports and returns, assessment
and payment of taxes, plaintiff is, and ought to be,
estopped from maintaining this action.

XIII.
That this defendant shortly after the issuance of
the said withdrawal order of September 27th, 1909,
consulted its attorney and counsellor, who was
learned in the law, and recited to him all of the facts
with reference to the location of said " Montana
Placer Mining Claim" and the work done under said
location, and all of the facts attendant upon the
acquisition by this defendant of the title to said loca-
tion, and inquired of its said attorney and counsellor
with respect to the effect upon said location of the
said withdrawal order, and said attorney and counsel-
lor thereupon advised this defendant that said with-
drawal order w^as invalid and ineffective should the
same be claimed to relate to or affect the said land
described in plaintiff's bill, that said location was a
valid and subsisting location, and that the said loca-
tors, and their successors in interest, had the right to

40 The United States of America vs.

occupy and possess said land and to drill and explore
for oil therein and thereon and to appropriate [31]
any oil discovered therein or thereon; that this de-
fendant, acting and relying upon said advice and be-
lieving the same to be correct, honestly and in good
faith and in the belief that it had the right to the
possession of said land and to explore for oil thereon,
continued in such possession and caused the work of
drilling wells for oil thereon to be continuously prose-
cuted to the discovery of oil in such well ; and that in
all of its actions and conduct with reference to said
land this defendant has acted in reliance upon and
pursuant to the advice so given as aforesaid, in good
faith, and believing the same to be correct.

WHEREFORE, this defendant prays that it
may be declared by the judgment of this Court
that the cause of action alleged by plaintiff in its
said bill of complaint is a cause of action cognizable
at law, and that said bill of complaint does not
state any cause of action cognizable by a court of
equity entitling plaintiff to relief by a court of
equity; that this defendant have judgment that
plaintiff take nothing by its said bill of complaint.
But should the Court determine that said bill of
complaint is sufficient to entitle plaintiff to be
heard in a court of equity, then that the Court by
its judgment shall decide and declare that plaintiff
take nothing by its said bill, and that said bill be
dismissed as to this plaintiff; that it be further
declared by the decree of the Court that the location
of the said " Montana Placer Mining Claim" was
and is a valid location of the land described in

California Midway Oil Company et ah 41

plaintiff's bill of complaint, under the placer
mining laws of the United States; that said locators
of said claim, and all persons lawfully claiming
under them are entitled to possession of said land,
and to develop the same for the minerals therein
contained, and when found, to extract, remove and
dispose of said minerals; that said locators and
those lawfully claiming under them are also entitled
to all and singular [32] such rights as are
granted by the laws of the United States, and to a
United States patent for the said "Montana Placer
Mining Claim," and that this defendant in par-
ticular, by reason of its claim to occupation, and
diligent prosecution of wTork upon, and expendi-
tures of money in connection with, that portion of
the land mentioned and described in plaintiff's bill
of complaint, is entitled to the same, to wit, sixty
acres, and that this defendant have such other and
further relief as may be agreeable to equity, the
premises considered.

GEO. E. WHITAKER,
Attorney for Defendant California Midway Oil
Company. [33]

[Endorsed] : In Equity— No. B-10. In the Dis-
trict Court of the United States for the Southern
District of California, Northern Division, Ninth
Circuit. United States of America, Plaintiff, vs.
California Midway Oil Company et al., Defendants.
Answer of California Midway Oil Company. Filed
June 15, 1917. Wm. M. Van Dyke, Clerk. R. ;S.
Zimmerman, Deputy. Geo. E. Whitaker, Attorney

42 The United States of America vs.

at Law, Bakersfield, California, Attorney for De-
fendant California Midway Oil Company. [34]

In the District Court of the United States for the
Southern District of California, Northern Di-
vision, Ninth Circuit.

No. B-10— IN EQUITY.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

CALIFORNIA MIDWAY OIL COMPANY,
ASSOCIATED OIL COMPANY, CO-
LUMBUS MIDWAY OIL COMPANY,
32 OIL COMPANY, L. B. McMURTRY,
J. M. McLEOD, and STANDARD OIL
COMPANY,

Defendants.

Answer of Defendants Thirty-two Oil Company and
J. M. McLeod.

Come now the defendants Thirty-two Oil Com-
pany and J. M. McLeod, defendants in the above-
entitled suit, and answer the amended bill of com-
plaint herein as follows:

FIRST DEFENCE.

As and for their first defence herein these an-
swering defendants herein admit, deny and allege:

Admit that the defendants named in paragraph I
of said amended bill of complaint are and wTere

California Midway Oil Company et al. -13

corporations as therein alleged.

Admit that defendant J. M. McLeod is a citizen
of the United States and a resident of the Southern
District of California.

II.
Deny, that for a long time prior to or on Sep-
tember 27, 1909, or at all times since, or at any
time, plaintiff has been, or now is, the owner, or
entitled to the possession, of the following mineral
oil and gas land, to wit:

The Northwest Quarter (NW. %•) of Section

Thirty-two (32), Township Thirty-one (31)

South, Range Twenty-three (23) East, Mount

Diablo Base and Meridian, [35]

or of any part thereof, or of the petroleum, gas or

any other mineral contained in said lands, or any

part thereof. Admit that plaintiff is the holder

of the naked title to said lands, but aver that such

title is held subject to the rights and conditions in

this answer hereinafter set forth.

III.
Admit that the President of the United States,
then acting under claimed (but not legally in-
vested) authority so to do, did, on September 27,
1909, by executive proclamation, made a with-
drawal and reservation of certain areas of land,
but deny that said order of withdrawal duly, or
regularly, or at all, withdrew or reserved all or
any of the land particularly described in said
amended bill of complaint from mineral explora-
tion, or from all or any forms of location, or settle-
ment, selection, filing, entry, patent, occupation or

44 The United States of America vs.

disposal, under the mineral and/or nonmineral
lands laws of the United States, but, on the con-
trary, allege that at no time, did the President, or
an}' other officer of the United States, either under
authority of law or otherwise, withdraw said or any
lands whatsoever from mineral exploration or occu-
pation, and allege that said withdrawal did not
affect or impair the rights of these defendants or
of their predecessors in interest, or of those claim-
ing by, through or under them or either of them in
and to said lands, because, on September 27, 1909,
and prior thereto, and at all times since, these
defendants, their predecessors in interest, and
those claiming by, through and under them, were
bona fide occupants and claimants of said lands as
oil and gas bearing lands, and were at said date,
and at all times since, until the discovery of oil
and gas in commercial quantities thereon, in dili-
gent prosecution of work leading to discovery of
oil and gas thereon, and that since said discovery
the defendants have continuously remained in pos-
session of said property, and have done each year
the [36] annual assessment and development
work thereon required by the mining laws of the
United States, and in all that was done by these
defendants and their predecessors and privies in
interest, with reference to said land they acted
fully in accordance with the regulations prescribed
by lawT, and according to the local customs and
rules of miners in said district.

IV.
Deny that, either in violation of the proprietary

California Midway Oil Company et nl. 45

and/or other rights of plaintiff, or in violation of
the laws of the United States, or of any lawful
order of the President of the United States, or in
violation of the alleged order of withdrawal of
September 27, 1909, or in disregard of, or contrary
to, or by infringement upon any governmental
policy then or thereafter adopted by the United
States, for the protection, conservation, disposal
and/or use of the petroleum, oil and/or gas con-
tained in said land, or in lands belonging to the
United States, these defendants, or any of the de-
fendants herein, entered upon and/or took pos-
session of the land hereinbefore described, at any
time subsequent of the land hereinbefore described,
at" any time subsequent to September 27, 1909, for
the purpose of prospecting, exploring, drilling oil
wells for discovery, extracting, producing, convert-
ing, or appropriating to their own use, or to the
use of any of them, petroleum, oil and/or gas there-
from. Deny that any of the defendants herein did
so prospect, explore, drill wells for, or discover,
extract, produce, convert or appropriate to their
own use or to the use of any of them, oil or gas
on September 27, 1909, or at any time subsequent
thereto.

V.
Deny that none of the defendants herein had
discovered petroleum oil, gas or other minerals on
said northwest quarter prior to September 27, 1909.
Allege that in May, 1909, [37] defendant Cali-
fornia Midway Oil Company found and discovered
oil in commercially paying quantities in a well

46 The United States of America vs.

which it had drilled upon said northwest quarter.

VI.

Deny that none of said defendants was, on Sep-
tember 27, 1909, a bona fide occupant or claimant
of said land, in diligent prosecution of work lead-
ing to discovery of oil or gas thereon or therein.
Allege that these defendants long prior to Sep-
tember 27, 1909, had initiated rights on said land,

their
and that these defendants and fe privies in in-
terest, on September 27, 1909, were, and for a long
time prior thereto had been, and ever since have
been, bona fide occupants and claimants of said
land, in open and notorious possession thereof, and
at all said times, on, prior and for a long time
subsequent to September 27, 1909, these defendants
were engaged in diligent prosecution of wrork lead-
ing to discovery of oil and gas thereon, and, prior
to September 27, 1909, had expended large amounts
of money thereon, in acceptance of the public offer
of plaintiff set forth in section 2319 of the Revised
Statutes of the United States, and were, on and
after September 27, 1909, actually engaged in the
diligent prosecution of work leading to discovery
of oil and gas thereon or therein, in accordance
with the regulations then prescribed by law, and
according to the local customs and rules of miners
in said district.

VII.

Deny that long after or at any time after said
alleged withdrawal order of September 27, 1909,
any of the defendants herein drilled oil or gas wells

California Midway Oil Company et ah 47

on said land for extraction, production, conversion,
and/or appropriation of petroleum oil and/or gas
therefrom, in violation of the proprietary or any
rights of said plaintiff, and/or in violation of the
laws of the United States, and/or in [38] viola-
tion of said alleged order of withdrawal of Sep-
tember 27, 1909, or in violation of any law or order,
and/or in disregard of, contrary to, and/or in-
fringement upon any governmental policy adopted
and/or declared by the United States for the pro-
tection, conservation and/or disposal of petroleum
oil or gas in said land, or in any lands alleged to
belong to the United States, to the great and /or
irremediable or to any damage of the plaintiff,
and/or to the great and/or irreparable or to any
injury of said land, or of other lands alleged to
belong to the United States adjacent to said land,
have extracted, produced, converted and/or ap-
propriated to their own use, or at all, from the land
hereinbefore described, or any lands adjacent there-
to, any petroleum oil and/or gas.

Allege that these defendants and those claiming
by, through and under them are in the lawful pos-
session and occupation of the land hereinbefore
described, and have produced and are now pro-
ducing oil and gas therefrom in the ordinary and
regular way, and have used and marketed said oil
and gas in the ordinary course of their business,
as the true and lawful owners thereof.

Allege that these defendants and those claiming
by, through and under them will continue to
operate their existing oil and gas wells upon said

48 The raited States of America vs.

land, but deny that such operation has caused, or
that it can or will cause, great or irreparable in-
jury or damage, or any damage whatever to said
plaintiff. Allege that the operation of said wells
and all of them is highly beneficial, and to dis-
contue or shut down the same would cause enor-
mous loss and damage, to said land and to these
defendants.

Deny that the amount of oil and gas produced
and saved from said land is unknown to plaintiff,
and allege [39] that same is fully known to
plaintiff; that these defendants are informed and
believe and therefore allege that said plaintiff has
had every opportunity afforded it to ascertain the
full production of said lands long prior to the com-
mencement of this action, and has had at all times
full information concerning the price and value of
said oil and gas, and that there is not and never
has been any occasion whatever for resorting to a
court of equity, to ascertain either the amount or
value of oil or gas produced from said land.

VIII.
Deny that the defendants in this suit or any of
them, have drilled, maintained and/or operated
oil and/or gas wells on the land hereinbefore de-
scribed, received/or have extracted and produced
petroleum oil and/or gas from such wells in an
unskilled, negligent, careless and/or unworkmanlike
manner so as to cause the inflow of any large,
unnecessary and/or unreasonable quantity of water
into such wells, or into the sands and/or oil reser-
voirs in wrhich petroleum oil and/or gas are con-

California Midway Oil Company et ah 49

tained in such land, in such or any manner or to
such extent or in such or any quantities as to cause
any water to infiltrate, saturate and/or impregnate
such oil sands and/or reservoirs, and/or the petro-
leum oil and/or gas therein, to the great or
irremediable or any damage to said land, or the
petroleum oil and/or gas deposits therein.

Deny that the defendants in this suit or any of
them are now continuing to cause great or irre-
parable or any damage or injury to said plaintiff
or to said land, or to the complete or any extermi-
nation or destruction of the petroleum oil and/or
gas deposits therein.

IX.
Deny that of the petroleum oil and gas heretofore
extracted or produced from said land by the de-
fendants or any [40] of them, large or any
quantities have been wasted. Deny that large or
any quantities have been sold or delivered to other
persons or corporations whose names are to said
plaintiff unknown, and cannot, for that reason, be
stated in said amended bill of complaint. Deny
that plaintiff is unable to state the amount, value,
and/or quality of the said oil and gas which plain-
tiff claims to have been converted, appropriated,
used, consumed, sold and/or delivered, and on its
information and belief allege that none of the
defendants has ever refused to furnish to the
plaintiff all the information, records and data
regarding said oil and gas and the disposition
thereof, and the price and value thereof, which
would be obtainable by or through the order of this

50 The United States of America vs.

Court, and allege that the information freely
tendered to plaintiff by each of said defendants,
and never refused by any of them so far as these
defendants are informed and believe, is full and
adequate, and that there is no occasion or cause
for any proceeding in this Court by way of dis-
covery.

X.
Admit and allege that these defendants claim and
have right, title and interest in all the hereinbefore
described land, and in and to the petroleum oil and
gas therein and extracted therefrom. Deny that
such claim or right is predicated upon or claimed
directly or indirectly or at all through or under
any pretended mining location. Deny that the min-
ing location referred to in paragraph X of said bill
of complaint was or is a pretended location, or that
the same falsely pretended to have been made on
said land by or in the names of the persons re-
ferred to in paragraph X of said amended bill of
complaint; deny that the said persons appearing
as locators in said claim were or constituted a [41]
pretended association of eight persons acting as
locators, or under and through pretended notice of
any pretended location. Deny that said placer
mining location was, through the unauthorized or
fraudulent proclamation of L. B. McMurtry, or of
any other person, spread upon the Mining Records
of the county in which said land is located; but, on
the contrary, allege, on their information and be-
lief, that said placer mining claim and location
were duly and regularly made by and on behalf

California Midway Oil Company et al. 51

of said locators, under written authority for such
purpose, and that there was no agreement or under-
standing whatever that said location was or should
be for the benefit of any other person or persons
than said eight locators. Deny that said location or
location notice was unlawful, fraudulent or in-
valid, or that the same has no effect, either in law
or in equity, or that said notice was not made or
caused to be recorded by said locators, through or
by any person duly authorized so to do, and deny
that said location was not made and said notice was
not recorded in the interest of or for the benefit or
use of said locators or any of them, either indiv-
idually or as an association, and deny that said loca-
tion wTas made and said notice was caused to be
spread upon the Mining Records by said L. B. Mc-
Murtry, unlawfully, fraudulently, secretly, or with-
out the knowledge or consent, direction, sanction or
subsequent ratification of said locators, or that the
same wTas for the exclusive use and benefit and in
the sole interest of the said L. B. McMurtry or some
other person than said persons whose names were
so used, or that the same was for the interest at
all of said McMurtry or of any other person or per-
sons than said locators, and deny that said location
was made with and for the sole and only purpose
and intent, or with the purpose or intent at all, by
such alleged device, [42] fraud or concealment,
to secure to said L. B. McMurtry and his assigns,
or to some other person than such persons whose
names were so used, a greater area of mineral land
than it was lawful, at the date of such location or

52 The United States of America vs.

now, to be embraced in a single location by said L.
B. McMurtry or by any one person or corporation,
or by less than eight persons; and deny that said
location was made unlawfully or in violation of or
in fraud of the rights of the plaintiff, or in viola-
tion of S'ection 2331 of the Revised Statutes of the
United States, or any other law of the United
States.

On the contrary, these defendants, on their in-
formation and belief, allege that said several
locators made and constituted said L. B. McMurtry
their true and lawful attorney in fact, to locate for
them and in their names, placer mining claims for
oil ; that said powers of attorney so executed by said
locators were in writing, duly acknowledged and
recorded ; that said respective locators had no agree-
ment or understanding whatever with said Mc-
Murtry, save and except as in said powers of attor-
ney stated; that said locators had no purpose what-
ever to violate the laws of the United States, or to
assist anyone else so to do, or to cheat or defraud
either the United States or persons who should pur-
chase upon the faith of their recorded powers of at-
torney and locations made thereunder; that each of
said locators was of full age, a citizen of the United
States and qualified to be a locator, and that said
McMurtry had no arrangement whatever, either di-
rectly or indirectly, with said locators or either of
them, that he should have any interest whatever in
the locations which he should make, or that any
other person except said locators should have any
ownership therein. [43] Allege that these defend-

California Midway Oil Company et ah 53

ants and each of them acquired their interest and
rights in said lands upon the faith of the public
records, in which appeared the power of attorney,
duly and regularly made by each of said locators,
and the location notice made, posted and recorded
in accordance with the authority contained in said
powers of attorney, and the conveyances made by
said attorney in fact, in all respects as authorized
by said recorded powders of attorney.

And these defendants allege that, after said loca-
tions had been made, and the fact known that enor-
mous tracts of land had been located for them and in
their names by the said attorney in fact, and that
oil had been discovered upon said tracts, and con-
tracts negotiated concerning the same, each of said
several locators, in his owTn proper person, duly exe-
cuted and acknowledged his written ratification of
all that his said attorney in fact had done and of
the binding force of said recorded powTer of attor-
ney, Avhich said ratification w^as made and executed
in July or August of 1910.

Deny, on information and belief, that plaintiff,
except as stated in said amended bill of complaint,
has no knowledge or information concerning the
nature of any other claims asserted by the defend-
ants herein, or any of them.

Deny that none of said defendants has or ever has
had any rights, title or interest in said land or any
part thereof, or any right, title or interest in or to
the petroleum, mineral oil or gas deposited therein,
or any right to extract petroleum, gas or other min-
erals from said land, or to convey or dispose of the

54 The United States of America vs.

petroleum or gas so extracted or any part thereof.
Allege that these defendants and those claiming by,
through and under them or either of them, have full
right and title to said land, excepting only the naked
legal title [44] thereto, held in trust by said
plaintiff for said defendants.

Deny that the defendants who entered upon said
land and drilled oil and gas wells thereon every " ap-
propriated" any petroleum oil or gas deposited
therein ; and deny that any acts of the defendants, or
any of them, with reference to said land and/or the
mineral oil or gas deposited therein were in violation
of the laws of the United States, or of said alleged
order of withdrawal, or of any rights of the plain-
tiff, herein, and deny that the same interfered with
the execution by said plaintiff of any public policies
with respect to said land, or the petroleum oil or gas
therein.

XII.

Deny that the present value of the land herein-
before described exceeds $400,000.00. Allege that
said land, prior to the improvements made thereon
and for the benefit thereof by the defendants, was
barren, desert land, and of virtually no value for
any purpose; that it was not known or determined
whether it had any value whatever for oil or gas;
that the principal value which said land now has is
due to the risk and chances taken by these defend-
ants in sinking oil wells thereon, and in demonstrat-
ing that said property contains oil and gas in com-
mercially paying quantities. [45]

California Midway Oil Company et al. 55

SECOND DEFENCE.

As and for their second defence herein, defend-
ants 32 Oil Company and J. M. McLeod admit, deny
and allege:

Repeat their said first defence herein and make
the same a part hereof the same as though again
fully set out herein.

II.

Allege that on January 1, 1909, the said north-
west quarter was public land of the United States,
open to location and purchase and unappropriated
under the laws of the United States relating to land
commonly known as " placer," and relating to lands
containing petroleum and other mineral oils, and
chiefly valuable therefor, and was at that time
vacant public land.

Allege that on January 1, 1909, the eight persons
named as locators in paragraph X of said bill of
complaint, each of whom was then a citizen of the
United States over the age of twenty-one, and all of
whom had theretofore associated themselves to-
gether for the purpose of acquiring title to oil lands
in Kern County, State of California, duly located
said land under the name of " Montana Placer Min-
ing Claim," and duly marked the same upon the
ground, posted notice of said location upon said
land, marked the boundaries thereof, and recorded
a notice of said location in the records of said Kern
County, and entered into possession and occupation
of said land and every part thereof under said
claim. That these defendants are informed and be-

56 The United States of America vs.

lieve and therefore allege that said several locators
and each of them made said location for their and
each of their own use and benefit, and for the use
and benefit of no other person whatever, and with
the purpose of acquiring title to said land and to the
gas, oil and other minerals therein contained, under
the mining laws of the [46] United States; and
that said location notice was duly recorded, on or
about January 25, 1909, in the Eecords of said Kern
County.

Allege that on long prior to September 27, 1909,
said locators had executed to defendant McLeod
their quitclaim deed for the said northwest quarter,
and that in consideration thereof defendant McLeod
had promised and agreed with said locators : that he
wTould diligently prosecute drilling operations on
said northwest quarter; that in the event oil was
discovered on said northwest quarter in said opera-
tions, defendant McLeod would thereupon apply to
the United States for letters patent to said quarter
section, and would proceed to obtain patent there-
for; and that when the receiver's final certificate
was issued in said patent proceeding, defendant Mc-
Leod w7ould reconvey to said locators the north one
hundred acres of said quarter section.

Allege that thereupon defendant McLeod erected
a standard drilling rig and other equipment upon
said northwest quarter, for which said McLeod paid
more than One Thousand Dollars.

Allege that long prior to September 27, 1909, de-
fendant McLeod leased the south sixty acres of said

California Midway Oil Company et al. ■"><

northwest quarter to defendant California Midway
Oil Company.

Allege that long prior to September 27, 1909, de-
fendant J. M. McLeod assigned to defendant 32 Oil
Company all his rights in and to the said Lease to
said California Midway Oil Company and that the
consideration therefor was a large number of shares
of the capital stock of defendant 32 Oil Company
issued by it to defendant McLeod and other good
and valuable consideration.

Allege that on or about August, 1910, defendants
32 Oil Company, J. M. McLeod Company, and the
said locators, [47] executed to defendant Asso-
ciated Oil Company their quitclaim deed for the
north one hundred acres of said northwest quarter.

Allege that from long prior to September 27,
1909, until the time of said conveyance to said Asso-
ciated Oil Company, to wit, about August, 1910, said
defendants J. M. McLeod, 32 Oil Company and Cali-
fornia Midway Oil Company, were in open, notori-
ous and continuous possession and occupation of all
of said nortlrvvest quarter. That at all times there-
after defendants J. M. McLeod, 32 Oil Company
and California Midway Oil Company have been in
said possession and occupation of the South Sixty
acres of said nortlrvvest quarter, and defendant
Associated Oil Company of the north one hundred
acres thereof.

III.

Allege that prior to May, 1909, defendant Cali-
fornia Midway Oil Company commenced drilling a
w7ell for oil upon said northwest quarter. That said

58 The United States of America vs.

California Midway Oil Company diligently and con-
tinuously prosecuted said drilling until May or
June, 190!), and that in May or June, 1909, defend-
ant California Midway Oil Company discovered and
developed in said well oil in commercially paying
quantities. That ever since said discovery defend-
ant California MidwTay Oil Company has operated
said well and has produced and obtained oil there-
from.

Allege that defendant Associated Oil Company,
upon obtaining said north one hundred acres as
aforesaid, took possession thereof, and thereafter
diligently and continuously prosecuted drilling
operations thereon until it had developed thereon
oil in paying quantities, and that defendant Asso-
ciated Oil Company has always since their comple-
tion, operated w^ells drilled by it on said land and
has produced oil therefrom.

Allege that in such work of drilling, defendants
California Midway Oil Company and Associated
Oil Company expended [48] respectively, many
thousands of dollars.

IV.

Allege that it was stipulated and agreed by said
locators and defendant McLeod, and likewise by de-
fendants California MidwTay Oil Company and Asso-
ciated Oil Company as they acquired their said in-
terests in said northwest quarter, that said north-
west quarter should be developed and worked as one
mining claim, and that any work done and any im-
provements or discovery made upon said northwest
quarter by any of said persons or corporations,

California Midway Oil Company et ah 59

should be done and made for the benefit and ad-
vantage of all of said northwest quarter af th^
Northeast Quarter of section 32 also.

Allege that for and on behalf of said "Montana
Mining Claim" these defendants have performed or
caused to be performed fe? a**4 on behalf of said
northwest quarter more than one hundred dollars
worth of labor during each and every year since
January 1, 1909, and have caused to be expended
during each such year more than one hundred dol-
lars for improvements on said claim, which labor
and improvements were all done and made for the
purpose of discovering, developing and producing
oil upon said claim.

VI.

Allege that these defendants and their said co-
defendants herein acquired their respective rights
and interests in said northwest quarter of section 32
as aforesaid, and made all of their said respective
expenditures for and on account of said northwest
quarter, and placed and made their said respective
improvements and did their said work of develop-
ment and operation upon said land, in good faith,
without any knowledge of suspicion whatsoever of
any actual, claimed or asserted infirmity, defect or
invalidity, or of any, actual, claimed [49] or
asserted lack of bona fides or necessary qualifica-
tions upon the part of said locators or any of them,
in making said locations or any of them, and all in
reliance upon the validity and bona fides of said
locations and each of them.

GO The United States of America vs.

Thai the said possession and interest of these de-
fendants, and the respective interests and posses-
sion of their codefendants herein, in said northwest
quarter, and their respective operations thereon,
were at all times with the full knowledge of said
plaintiff by and through examinations of said
northwest quarter and of the things being done
thereon made at various times by the agents of the
Department of the Interior of the plaintiff and re-
ports thereof by said agents to said Department;
that notwithstanding such knowledge this plaintiff
made no objection whatever at any time prior to the
filing of the bill of complaint herein to the claim of
title by said McLeod or of the claim to said north-
west quarter by these answering defendants or of
the respective claims thereto by those claiming as
aforesaid by, through and under these answering
defendants, or either of them, or to the possession,
occupation and working of said northwest quarter
by said persons and corporations as aforesaid, until
the filing of said bill of complaint. And that on ac-
count of the belief and reliance on the part of these
answering defendants and said Associated Oil Com-
pany and said California Midway Oil Company, and
each of them, in the validity of said locations as
aforesaid, and because of the great expenditures
made by said McLeod and said defendants as afore-
said, and on account of the plaintiff's said knowl-
edge thereof and failure as aforesaid to make objec-
tion thereto, these defendants allege and assert that
this plaintiff is now estopped from claiming that it
is entitled to the possession of said land described

California Midway Oil Company et al. (>1

in said amended bill of complaint or of the oil, gas
or minerals therein, and that [50] the plaintiff is
guilty of laches in the institution of this suit and in
objection to the rights and title of these defendants
and of any defendant herein claiming by, through
or under these defendants or either of them, and
that this plaintiff ought not now in all equity and
good conscience to be heard to assert any claim or
right to dispossess these defendants or any of them,
or of the other defendants herein claiming an inter-
est in said land, or to assert any claim of right or
title to or on account of any part of the oil, gas or
minerals therein or heretofore extracted therefrom.
[51]

THIKD DEFENCE.

As and for their third defence herein, defend-
ants, J. M. McLeod and 32 Oil Company admit,
deny and allege:

Eepeat their said second defence and make the
same a part hereof the same as though again fully
set forth herein.

II.

Allege that on and long prior to January 1, 1909,
the plaintiff, as the proprietor of the mineral lands
on the public domain of the United States, — includ-
ing placer mining lands and oil-bearing lands,
among others, — had permitted and acquiesced in the
entering upon said lands for the purpose of explor-
ing the same and making discovery, and the taking
and removing of the mineral contained in said
lands, and this had continued for so many years

62 The United States of America vs.

thai it became recognized as fully acquiesced in, so
that miners could proceed, as of right, in reliance
upon this custom.

III.
Allege that the Congress of the United States,
acting for and upon and concerning its said pro-
prietory rights, had long prior to January 1, 1909,
enacted the following as Section 2319 of the Revised
Statutes of the United States:

"All available mineral deposits in lands be-
longing to the United States, both surveyed and
unsurveyed, are hereby declared to be free and
open to exploration and purchase, and the lands
in which they are found, to occupation and pur-
chase by citizens of the United States, — . . .
under regulations prescribed by law and accord-
ing to the local customs or rules of miners in
the several mining Districts.
And said provision was duly approved and has
ever since been in full force.

Allege that in 1897 it was provided, by an Act of
that year, duly passed by said Congress, and ap-
proved by the President [52] of the United
States, that

"Any person authorized to enter lands under
the mining laws of the United States, may enter
and obtain patent to lands containing petro-
leum or other mineral oils, and chiefly valuable
therefore, under the provisions of the lawTs re-
lating to placer mining claims."
Allege that provision had been made by law and
regulations prescribed under which, before patent

California Midway Oil Company et ul. 63

should be granted, a discovery was required to be
made upon the claim for which patent was sought,
and it was recognized by Congress and by the courts
of the several States, including California, that a
person prospecting and exploring for oil who had
duly initiated his rights as to mining a claim, had the
right to continue his operations without interference,
until he had made discovery or abandoned the
attempt.

IV.
Allege that provision had been made by law prior
to January 1, 1909, whereby eight persons might join
together and locate 160 acres of oil land, and perfect
the right to patent by making one discovery for the
entire tract.

That in the making of such discovery and the ex-
ploration leading thereto, it wras w7ell known to the
plaintiff at all times that a period of from eight
months to twro years was usually required, and that
the operator must expend large sums of money in
preparing to drill for oil, and very large sums of
money in prosecuting such drilling to discovery ; and
that this was especially true where the work was
carried on in a desert remote from the source of
supplied, and where water was hard to procure and
living conditions made it difficult to obtain labor, as
was the fact regarding said northwest quarter.

V.
Allege that under these circumstances and said
state of the law with regard to oil lands upon the
public domain, all [53] of which existed on Janu-
ary 1, 1909, and thereafter until discovery was made

(>4 The United States of America vs.

on said claim (which statutes and regulations were
not governmental but were the authorized method by
which the plaintiff as the proprietor of lands possibly
containing oil or gas proposed and offered to sell the
same) the locators hereinbefore referred to, on Janu-
ary 1, 1909, for the purpose and with the intent of
accepting the offer so made by the plaintiff as a pro-
prietor of the land described in said amended bill of
complaint made and posted their notice of location
of the placer mining claim named in said amended
bill of complaint, and caused the same to be recorded,
and thereafter, in reliance upon and in acceptance
of the offer of the plaintiff, that said land was and
should be open to occupation and exploration and
purchase, and that, for the purpose of making discov-
ery, they, having initiated their said right might pro-
ceed to explore upon said land, in accordance with
the regulations prescribed by law, and according to
the local customs and rules of miners in said District,
— the said locators arranged to develop the north half
of said section 32 in a group form, and conveyed their
interest to said McLeod, and obligated him to pro-
ceed with the development of and upon said north
half of said section 32. That in accordance wTith
their initiated rights, and in further acceptance of
the offer of the plaintiff acting as a proprietor of said
land, these answering defendants expended large
sums of money prior to September 27, 1909, in the
erection of a drilling rig and other equipment upon
the land described in said amended bill of complaint,
and in other work thereon and also elsewhere, but for

California Midway Oil Company et al. 65

the benefit of said last-mentioned land and leading
to the discovery of oil thereon.

Allege that prior to, and after September 27, 1909,
these defendants, in reliance upon the contract aris-
ing because of the proposal and offer of the plaintiff
as the [54] proprietor of said lands, that said lo-
cators or persons acting in their right, might explore
and drill for oil thereon until discovery should be
made, or the effort to make discovery should be aban-
doned, and upon such discovery should have the right
to purchase said lands under the regulations pre-
scribed by law, and relying upon the fact that said
proposal had been accepted, and money had been
expended in substantial sums in the performance of
the conditions prescribed by the plaintiff, and that all
of said conditions had been met and performed, so as
to entitle said locators and these defendants in their
right and as their grantee, to go forward and make
available the said expenditures by discovering oil
and gas upon said property and perfecting its rights,
to patent, — these defendants proceeded, as herein-
before alleged, and performed each and all the con-
ditions on their part to be kept and performed, until
oil was discovered upon the land described in said
amended bill complaint.

VI.

Allege that neither of these answering defendants
nor any person or corporation claiming by, through
or under them, or either of them, ever intended to
or did in any wise abandon the right to go forward
to discovery upon said claim, but said work was at
all times diligently prosecuted, and in the manner

66 The United States of America vs.

and Avith the degree of diligence recognized by the
local customs of miners in said District, and known,
approved and acquiesced in by the plaintiff.

That, because of said offer made by the plaintiff
as the proprietor of said lands, and accepted and
acted upon as hereinbefore alleged, these defendants
acquired and had full right to go forward and perfect
these defendant's equitable title to said property by
making discovery of oil and gas thereon, and these
defendants did, in fact, acting by and [55]
through said California Midway Oil Company and
Associated Oil Company, cause said discovery to be
made, and said equitable title thereby to be perfected.
[56]

FOURTH DEFENCE.

As and for their fourth defence herein defendants
J. M. McLeod and 32 Oil Company admit, deny and
allege :

Repeat their third defence and make the same a
part hereof the same as though again fully set out
herein.

II.

Allege that for more than five years prior to the
commencement of this suit these defendants, and
their privies in interest, and those claiming an in-
terest in said northwest quarter by, through and
under these answering defendants, or either of them,
have been in the law7ful, peaceable, and continuous
possession of the land first described in said amended
bill of complaint, and continuously working and de-
veloping the same as a mining claim, without objec-

California Midway Oil Company et al. 67

tion, let or hindrance from plaintiff or anyone else:
that during all of said five years period plaintiff has
been fully informed and has known of said occupa-
tion and working of said land by said defendants;
and that the aforesaid work thereon has been openly,
notoriously and continuously carried on, under claim
of exclusive right thereto, with the full knowledge
of plaintiff, and without any objection or protest
whatever. [57]

FIFTH DEFENCE.

As and for their fifth defence herein, defendants
J. M. McLeod and 32 Oil Company, respectfully re-
assert their claim heretofore made by Motion, and
say that this court has no jurisdiction to hear or try
this case on the equity side of the court, and allege
that at the beginning of this action plaintiff was out
of possession of the land described in said bill of
complaint; that these defendants and those claim-
ing by, through and under them as hereinbefore
alleged in this answer, had been in open and notori-
ous possession thereof, under claim of right, since
long prior to September 27, 1909, under claim of
claim of right ; and that plaintiff has a full, speedy
and adequate remedy at law, and these defendants
are entitled to have this case sent and transferred to
the law side of this court and to a trial by jury.

WHEREFORE, these defendants pray:

1. That this case be transferred from the equity
side to the law side of this court, to be tried by a jury.

2. That the bill of complaint herein be dismissed ;

3. That the Court find and decree that the plain-
tiff is and should be estopped to assert any right in

68 The United States of America vs.

the land described in said bill of complaint as against
these defendants;

1. For their costs herein expended;

5. And for such other and further relief as equity
and good conscience shall require.

ROBERT M. PEASE,

Solicitor for J. M. McLeod and 32 Oil Company.
[58]

[Endorsed]: Orig. No. B-10-In Eq. In the Dis-
trict Court of the United States, in and for the South-
ern District of California, Southern Division.
United States of America, Complainant, vs. Cali-
fornia Midway Oil Company, et al., Defendants.
Answers of Defendants J. M. McLeod and 32 Oil
Company. Filed Jun. 20, 1917, Wm. M. Van Dyke,
Clerk. By T. F. Green, Deputy Clerk. Received
copy of the within answer this 20th day of June, 1917.
Albert Schoonover, Attorney for Complainant.
Robert M. Pease, Attorney at Law, 519 Story Build-
ing, Los Angeles, California, A-1508 Bdwy. 2761,
Attorney for Dfts. J. M. McLeod and 32 Oil Com-
pany. [59]

California Midway Oil Com pant/ ct al. 69

In the District Court of the United States for the
Southern District of California, Northern Divi-
sion, Ninth Circuit.

IN EQUITY— No. B-10.

UNITED STATES OF AMERICA,

Plaintiff,
vs.

CALIFORNIA MIDWAY OIL COMPANY, AS-
SOCIATED OIL COMPANY, COLUM-
BUS MIDWAY OIL COMPANY, 32 OIL
COMPANY, L. B. McMURTRY, J. M.
McLEOD, and STANDARD OIL COM-
PANY,

Defendants.

Answer of Defendant L. B. McMurtry.

L. B. McMurtry does hereby make and file his an-
swer to the amended bill of complaint on file in the
above-entitled suit.

FIRST DEFENSE.

As and for his first defense to the cause of action
set forth in said bill of complaint said defendant
moves the court for an order transferring the above-
entitled suit to the law side of the above-entitled
court for trial and final disposition. Said motion is
based upon the following grounds;

(a) Said bill of complaint affirmatively discloses
that said suit is one in ejectment brought by the
plaintiff out of possession to recover the possession
of the lands described in the complaint and one for

70 The United States of America vs.

damages for alleged past trespass upon said land de-
scribed in the complaint, over both of which said sub-
ject s of litigation defendant alleges this court of
[60] equity has no jurisdiction and for which plain-
tiff has a full, plain, speedy, complete and adequate
remedy at law.

(b) That the facts set forth in the said bill of
complaint fail to show any ground of equitable re-
lief or any right to equitable relief.

Said motion is made and based and will be made
and based upon the records and files in the above-
entitled suit.

SECOND DEFENSE.

Defendant for a second and separate defense to
the bill of complaint on file in the above-entitled and
numbered suit alleges that the said bill of complaint
does not state facts sufficient to constitute a cause
of action or suit against this defendant and does not
state facts sufficient to entitle the plaintiff to any re-
lief as against this defendant and alleges further that
the above-entitled court, sitting as a court of equity,
has no jurisdiction of the subject matter of said suit
because the allegations of the bill of complaint show
that the main case made thereby and the chief object
and purpose of the suit is to try the right to the pos-
session of the land described in the complaint as be-
tween the plaintiff out of possession and defendant
in possession of the land described in the complaint
and for a judgment for damages for alleged past
trespasses, for all of which alleged rights defendant
alleges plaintiff has a full, plain, speedy, adequate
and complete remedy at law and that a suit to en-

California Midway Oil Company et al. 71

force or try said rights and claims of the plaintiff is
without the jurisdiction of a court of equity
THIRD DEFENSE.

Defendant further answering said complaint al-
leges that this defendant is joined with a number of
other defendants in this cause for several distinct
and independent matters which [61] have no re-
lation to each other and in which, or the greater part
of which, this defendant is in nowise interested or
concerned and ought not to be implicated or im-
pleaded and alleges that this defendant is joined in
a purported cause of action for an accounting and
damages against certain of the defendants for pur-
chasing and receiving oil from other of the defend-
ants and is joined with other defendants in an action
for trespass upon the premises described in the com-
plaint, together with an action for damages for the
conversion of oil and gas extracted by them or pur-
chased by them or sold by them from said premises
or a part thereof.

FOURTH DEFENSE.

Arnd for his fourth defense to the said bill of com-
plaint on file in the above-entitled and numbered suit
this defendant admits, avers and denies as follows:

Denies that for a long time prior to or on the
27th day of September, 1909, or at all times or at
any time since said date the plaintiff has been or that
it now is the owner of the land described in the bill
of complaint or any part thereof; save and except de-
fendant admits that on said September 27th, 1909,
and at all times since said date the plaintiff has been

72 The United States of America vs.

and now is the holder of the naked legal title to said
land and as to that portion of the said quarter sec-
tion described as follows, to wit:

Commencing at the northwest corner of the north-
west quarter (NW. y^) of section thirty-two (32),
and running thence at a right angle southerly sixteen
hundred and fifty (1650) feet; thence at a right
angle easterly ten hundred and fifty-six (1056) feet;
thence at a right angle northerly sixteen hundred
and fifty (1650) feet to the northerly line of section
thirty-two [62] (32) ; thence at a right angle
westerly along said northerly line of section thirty-
two (32) ten hundred and fifty-six (1056) feet, con-
taining approximately forty (40) acres of land, more
or less, all in township 31 south, range 23 east, M.
D. B., and M., county of Kern, State of California,
hereinafter in this answer called " defendant's forty
(40) acres," and was and is the holder of said naked
legal title only as trustee for the use and benefit of
this defendent and his predecessors in interest, and
that said defendant at the time of the commencement
of this suit, for long prior thereto and ever since
has been and now is the owner of the full equitable
title to the said "defendant's forty (40) acres" of
the said land described in the complaint herein under
the circumstances, because and by reason of the facts
hereinafter in this answer fully set forth. Denies
that the said plaintiff either on the 27th day of Sep-
tember, 1909, or for a long time prior thereto or at
all times or at any time since said date was the owner
of or entitled to the possession of the oil, petroleum
or gas or all or any other minerals contained in said

California Midway Oil Company et at. 13

land described in the complaint or any part thereof,
but, on the contrary, alleges that on said 27th day of
September, 1909, for long prior thereto and ever
since said date the defendants herein by and through
themselves and by and through their predecessors in
interest have been and still are in the actual bona
fide possession and occupancy of the land described
in the complaint and were on the said 27th day of
September, 1909, and ever since said date, and at
the time of the commencement of this suit, and for
a long time prior thereto have been in the actual pos-
session of said land and rightfully entitled to hold
the possession thereof and to mine, extract and dis-
pose of the minerals, oil and gas therein contained
for their own use and benefit by virtue of the com-
pliance by the defendants referred to and their pred-
ecessors in interest with [63] the laws of the
United States relative to the sale and disposition of
its mineral lands and by virtue of the Act of Con-
gress of June 25, 1910, entitled: "An Act to au-
thorize the President of the United States to Make
Withdrawal of Public Lands in Certains Cases,"
and by reason of the further facts and circumstances
hereinafter set forth. That at the time of the com-
mencement of this suit and ever since the month of
November, 1912, this answering defendant was in
the actual, full and complete possession and occu-
pancy of the said "defendant's forty (40) acres" of
the said quarter section of land described in para-
graph II of the complaint herein and ever since has
been in the actual and continual possession of said
land up to and including the date of the commence-

74 The United States of America vs.

ment of this suit and on September 27, 1909, and
prior to said date and at all times since said date the
said defendants, and their predecessors in interest
ever have been and at the time of the commence-
ment of this suit were and still are actual bona fide
occupants and claimants of the said land described
in said complaint and the oil, gas, petroleum and
mineral therein contained, and that on and before
the said September 27, 1909, the said defendants and
their predecessors in interest were in the diligent
prosecution of work leading to the discovery of oil
and gas upon said land and continued in such dili-
gent prosecution of said work leading to the dis-
covery of oil and gas upon said land.

II.
Denies that on the 27th day of September, 1909,
the President of the United States, either acting by
and through or by or through the Secretary of the
Interior or under authority legally invested in him
so to do or otherwise duly or regularly or at all
withdrew or reserved all or any of the land de-
scribed in the bill of complaint from mineral exploit-
ation or from all or any form of location or settle-
ment or selection or filing or [64] entry or patent
or occupation or disposal under the mineral land
laws of the United States or at all. Denies that on
or since the 27th day of September, 1909, that none
of said lands has been subject to exploration for
mineral oil or oil or petroleum or gas or to the occu-
pation or to the initiation of any right under the
public land or other laws of the United States, but
defendant avers that on and for long prior to and

California Midway Oil Company ft ah 75

ever since said last named date all of the lands de-
scribed in the complaint has been subject to such ex-
ploration, occupation and initiation of mineral rights
and rights therein and thereto under an// by virtue
of the laws of the United States.

Defendant alleges that as to the lands described
in paragraph II of the bill of complaint herein the
defendants herein and their predecessors in interest
and their successors were at the time of filing of said
bill of complaint and for long prior thereto author-
ized by the provisions of said Act of Congress ap-
proved June 25, 1910, hereinbefore in this answer
referred to, to continue in the occupation of the said
land and its exploration and development for petro-
leum or gas or any other minerals therein contained
for the reason that by the terms of said act of Con-
gress the force and effect of the order of withdrawal
of September 27, 1909, as to the said land described
in said complaint was, as this defendant is advised
by counsel learned in the law and therefore states
the fact to be, vacated and made null and void.

Defendant alleges that on September 27, 1909, the
said land described in the complaint contained and
bore oil and gas and that the defendant and his pred-
ecessors in interest on said 27th day of September,
1909, and long prior thereto were in the bona fide
occupation of and the actual claimants in the pos-
session of the said lands as oil and gas lands. That
the defendant and his predecessors in interest and
their successors remained in [65] the actual and
bona fide possession as claimants of said land ever
since the said 27th day of September, 1909, and prior

76 The United States of America vs.

thereto and that the said defendant and his pred-
ecessors in interest and their successors in the pos-
session of said lands as aforesaid and as claimants
thereof on said 27th day of September, 1909, were
in the diligent prosecution of said work and did con-
tinue the same until discoveries of oil or gas upon
said property.

III.
Denies that notwithstanding the premises or
otherwise or in violation of the proprietary or other
or any right or rights of the plaintiff or in viola-
tion of the laws of the United States or of lawful
or any orders or order or proclamation or proclama-
tions of the President of the United States or par-
ticularly or at all in violation of the said alleged
or any other order of withdrawal of the 27th day of
September, 1909, or any order of withdrawal or in
disregard of or contrary to or by infringement on
the governmental or any other policy adopted by
the United States for the protection or conservation
or disposal or use of the petroleum or gas con-
tained in the said land described in the said bill of
complaint or in other lands or land belonging to the
United States the said defendants, or any of them,
entered upon or took possession of the land in the
bill of complaint particularly described or any part
thereof long or at all subsequent to the 27th day of
September, 1909, or not prior thereto for the pur-
pose of prospecting or exploring or drilling oil wells
or well for or discovering or extracting or produc-
ing or converting or appropriating to their own use
or to the use of any of them petroleum or oil or gas

California Midway Oil Company et al. < 1

therefrom or at all subsequent to said September
27, 1909.

Denies that said defendants entered upon or took
possession of the land described in the bill of com-
plaint or any thereof [66] long or at all subse-
quent to the said 27th day of September, 1909, or
not prior thereto either for the purpose of prospect-
ing or exploring or drilling wells or well for or
discovering or extracting or producing or converting
to their own use or to the use of any of them
petroleum or oil or gas therefrom, and in this be-
half this defendant alleges that said defendants '
predecessors in interest entered upon the lands de-
scribed in said bill of complaint and took possession
thereof long prior to September 27th, 1909, and
alleges that on said 27th day of September, 1909,
defendants' predecessors in interest were bona fide
occupants and claimants of the said lands described
in paragraph II of said bill of complaint and of the
whole thereof, and alleges that he is informed and
believes, and therefore states on such information
and belief the fact to be that defendants' prede-
cessors in interest to the said land were on said
September 27th, 1909, in the actual possession of
the said land described in said complaint and in the
diligent prosecution of work leading to the discov-
ery of oil or gas upon said land, and from said date
until the acquisition by this defendant of his in-
terest in said land in the diligent prosecution of
such work leading to such discovery and thereafter
the said work leading to discovery of oil and gas
upon said land was continued and the said work

78 The United States of America vs.

was diligently prosecuted by this defendant's pred-
ecessors in interest and their successors herein until
the discovery in said land of petroleum or gas.

IV.
Answering paragraph V of said complaint, de-
fendant admits that none of said defendants or any
person or corporation under whom or through
whom this defendant claims a right or interest to
the land described in the said bill of complaint
had discovered petroleum oil or gas or other min-
erals on or in said land prior to September 27th,
1909, but defendant denies that [67] the said land
described in said complaint or any thereof wTas
withdrawn by said or any alleged order of with-
drawal on said September 27th, 1909, or at any
other date or at all withdrawn and denies that none
of said defendants or any person or corporation
under whom or through whom they or any of them
claim a right or interest in said land described in
said bill of complaint mentioned had discovered
petroleum or gas or other minerals or mineral on
or in said land before said land was withdrawn by
any order of withdrawal, and in this behalf this
defendant alleges that prior to said 27th day of
September, 1909, said defendants and their prede-
cessors in interest and their successors became and
ever since have been bona fide occupants or claim-
ants of said land under valid location and claim
made within the meaning and purport and effect of
the lawTs of the United States and of the proviso in
the said order of withdrawal of September 27th,
1909.

California Midway Oil Company et al. 79

Answering paragraph VI of said bill of com-
plaint defendant denies that none of the defendants
was on the 27th day of September, 1909, a bona fide
occupant or claimant of said land or in the diligent
prosecution of work leading to the discovery of oil
or gas thereon or therein.

VI.

Defendant admits that the other defendants here-
in have drilled oil and gas wells upon the land de-
scribed in the bill of complaint, which wells were
drilled for the production of oil and gas found upon
said land, but this defendant denies that the de-
fendants or any of them long after the 27th day of
September, 1909, or at any other time drilled oil or
gas wells on said land in violation of the proprietary
or any rights or right of the plaintiff herein or in
violation of the laws of the United States or any
thereof or of the proclamation or [68] proclama-
tions or order or orders issued by the President of
the United States or particularly or otherwise in
violation of the order of withdrawal of September
27th, 1909, or any other date, or in disregard of or
contrary to or by infringement upon the general or
any governmental or other policy adopted or de-
clared by the United States either for the protec-
tion or conservation or use or disposal of petroleum
oil or gas in the land described in the complaint or
other land or lands belonging to the United States
or to the great or irreparable or any damage to the
plaintiff or to the great or irreparable or any in-
jury of the lands described in said bill of complaint

80 Tin United States of America vs.

or to the great or irreparable or any injury of said
land described in said bill of complaint or any thereof

or to the great or irreparable or other injury or any
injury to other land belonging to the United States.
Denies that the defendants have extracted or pro-
duced or converted or appropriated to their own

or to the use of any of them from any lands
adjacent to the land described in the complaint or
any other land belonging to the United States large
or any quantities of petroleum oil or oil or gas
or that the defendants or any of them are now con-
tinuing so to do or that the defendants are or any of
them is threatening to or will hereafter continue to
do so either to the great or any irreparable or any
injury to the said adjacent or other lands of the
United States or to the great or any irremediable
or any damage to the plaintiff. This defendant
denies that he has and will continue to produce and
dispose of oil and gas from "defendant's forty (40)
acres" of the land described in the complaint here-
in, or any part thereof in violation of any prop-
rietary rights of the plaintiff or any proclamation
or order of the President of the United States or
the order of withdrawal of September 27th, 1909.
or any policy adopted or declared by the United
States or from any land belonging to the [69]
United States or to the great or irreparable or any
injury to any land of the rjlaintiff or to the great
or irreparable or irremediable or to the great or
irreparable or irremediable or any damage to the
plaintiff.

California Midway Oil Company et al. 81

VII.

Answering paragraph VIII of the bill of com-
plaint, denies that the defendants have or any of
them has drilled or maintained or operated oil or
gas wells on said land described in the complaint
or any thereof or have or has extracted or produced
petroleum oil or oil or gas from such wells in an un-
skilled or negligent or careless or unworkmanlike
manner or so as to cause the inflow of large or un-
necessary quantities or quantity of water into such
wells or wTell or into the oil sands or sand or oil
reservoirs or oil reservoir in wThich the petroleum
oil or oil or gas are or is contained in such land or
any thereof, or in such a manner or to such an
extent or in such quantities as to cause wrater to
infiltrate or to saturate or to impregnate such oil
sands or sand or reservoirs or reservoir or the
petroleum oil or oil or gas therein either to the
great or irremediable or any damage of the plaintiff
or to the great or irreparable or any injury of said
land or to the petroleum or gas deposit therein or
any thereof or at all in an unskilled or negligent or
careless or unworkmanlike manner. On the con-
trary, defendant alleges that all wells drilled upon
said land were drilled, maintained and operated
and all oil and gas obtained and extracted and pro-
duced therefrom have been extracted and produced
therefrom in a good, workmanlike manner and ac-
cording to wrell known and approved methods.

Denies that the defendants are, or any of them
is, now continuing to drill, maintain or operate
gas or oil wells on or extract or produce petroleum

82 The United States of America vs.

oil or gas from wells upon said land described in
the complaint or any part thereof in an [70] un-
skilled, negligent or careless or unworkmanlike
manner or to perform the acts or any of them com-
plained of in paragraph VIII of the complaint
herein or will continue so to do, or have or any of
them has threatened or are or any of them is
threatening so to do said or any of said acts to the
further or any great or irreparable or any damage
to the plaintiff or to the further or other great or
irreparable or any injury to the land or any there-
of, or to the complete or any extermination or de-
struction of the petroleum oil or oil or gas or any
thereof deposited therein.

VIII.

Answering paragraph IX of said bill of com-
plaint defendant denies that the petroleum oil and
gas extracted and produced from said land or any
thereof have or has been wasted by the defendants
or either of them. Denies that this defendant sold
and delivered to other persons and corporations oil
and petroleum taken by the said defendant from
the " defendant's forty (40) acres" of the land de-
scribed in the complaint, or any part thereof, and
denies that he has himself used oil and gas pro-
duced by him lawfully or at all from the said
land.

IX.

Answering paragraph X of said bill of complaint
this defendant admits that he claims some right,
title and interest in the " defendant's forty (40)
acres" of the land described in the bill of complaint

California Midway Oil Company et al.

and in the petroleum oil and gas therein, and ad-
mits that each of the claims of said defendants
herein to the said land and all the land described
in the complaint is predicated upon and claimed
directly and mediately through the mining location
mentioned in the complaint; but denies that said
mining location is a pretended mining location.
Admits that said location was made on the 1st day
of January, 1909, [71] in the names of the per-
sons mentioned in said paragraph X of said com-
plaint, other than this defendant, but denies that
the said location was a pretense or was falsely pre-
tended to have been made on the land described in
the complaint. Denies that it was made by a pre-
tended association of eight persons. Denies that the
notice was a pretended notice or was a pretended
notice of a pretended location. Denies that the said
notice of location was unauthorized. Denies that
the same was fraudulent; denies that the same was
placed upon the mining records of the county in
w7hich the land is located on the 5th day of January,
1909, or at any other time through the unauthorized
or fraudulent procurement of this defendant or any
other person. But, on the contrary, defendant al-
leges that the said location was made by said de-
fendant for and on behalf of the other persons
named in paragraph X of the bill of complaint and
for the benefit and use of the said persons and
without fraud and without any intent to deceive or
defraud any person, firm or corporation or the
Government of the United States, and alleges that

84 The United States of America vs.

the said locations were made by the said locators
in absolute good faith.

Denies that none of said defendants has acquired
or could acquire or cannot now rightfully or law-
fully assert any right, title or interest in or to the
land described in the complaint or in or to the
petroleum oil or oil or gas therein or in or to any
of the petroleum oil or gas heretofore extracted
or now being extracted or which shall hereafter be
extracted or produced therefrom under or by reason
of said location referred to in paragraph X of said
complaint or under the notice thereof; denies that
the said locations mentioned in said paragraph X
of said bill of complaint or the notice thereof were
or either of them was a pretended location or a
pretended notice of location or w^ere or either of
them was unlawful or fraudulent or invalid or that
they have or either of them has no effect either
[72] in law or in equity; denies that the said loca-
tion mentioned in said paragraph X of said bill
of complaint was not made or that the notice there-
of was not caused to be recorded by said locators of
said claim or by any of them acting in their own
proper persons or through or by any person duly
authorized so to do by them or that said location
was not made or that said notice of location was
not recorded in the interest of or for the benefit or
use of said locators of said claim or any of them
either individually or as an association or that said
location was in, through or in fact made or that
said notice of location was in through or in fact
caused to be spread upon the said mining records

California Midway Oil Company et al. 85

by this defendant unlawfully or fraudulently or
secretly or without the knowledge or consent or
direction or sanction or subsequent ratification of
said locators of said claim or any of them, or for the
exclusive or any use or benefit or in the sole or any
interest of this defendant or some other person or
persons than said persons who located said claim
or with or for the sole or only or any purpose or
intent by such or any device or fraud or conceal-
ment or at all to secure to this defendant or his
assigns or assign or to some other person or per-
sons than such locators unlawfully or in violation
of or in fraud of the rights of the plaintiff or in
violation of section 2331 of the Revised Statutes of
the United States or of other or any law or laws
of the United States, or otherwise, a greater or any
area of mineral land than it was lawful at the date
of such location or at the present time to be em-
braced in a single location by this defendant or by
any one individual person or corporation or by an
association of persons composed of a less number
than eight persons severally qualified to make a
mining location.

Defendant alleges that the persons named in para-
graph X of [73] the bill of complaint herein as
locators of the placer mining claim mentioned in
said paragraph covering the land described in the
bill of complaint herein were each and all of them
citizens of the United States on January 1st, 1909,
over the age of twenty-one years, and that each
and all of them were on said date acting together
in good faith for the purpose of locating said land

86 The United States of America vs.

and acquiring title thereto under and in pursuance
of the laws of the United States relating to the sale
and disposal of mineral lands commonly known as
placer claims, and that on said date said persons
named in said paragraph, in compliance with said
laws duly located said land and then and there each
and all of them became vested with the title to an
undivided one-eighth interest in and to said land,
and that thereafter this defendant herein became
vested by mesne conveyance with the title of said
locators and each and all of them in and to the
" defendant's forty (40) acres'' of the land de-
scribed in the complaint and ever since said time
has been and nowT is the owner thereof. Defendant,
however, claims no right, title or interest in or to
any part of the land described in the complaint save
and except the " defendant's forty (40) acres"
thereof. Defendant further alleges that each of said
locators on January 1st, 1909, and ever afterward
was a bona fide locator of said land.

XL
Denies that either because of the premises in the
bill of complaint or otherwise or at all or for any
reason none of the defendants has ever had or now
has any right or title or [74] interest in or to or
any lien upon said land or any part thereof or any
right or title or interest in or to the petroleum or
mineral oil or gas deposited therein or any right to
extract petroleum or gas or other mineral from said
land or to convert or dispose of petroleum oil or
oil or gas so extracted or any part thereof. Denies
that, on the contrary, or otherwise, the acts or the

California Midway Oil Company et ah 81

act of those defendants who have or any of them
who has entered upon said land or drilled oil or
gas wells thereon or used or appropriated the petro-
leum oil or oil or gas deposited therein or assumed
to sell or convey any interest in or to any part of
said land or any part of the petroleum or gas ex-
tracted therefrom were or was all or any of them in
violation of the laws of the United States or of the
order of withdrawal mentioned in the complaint, or
that all or any of said alleged acts are or is in viola-
tion of the rights or any right of the plaintiff here-
in or the said alleged acts or any of them interfered
with the execution by the plaintiff of its public or
any policies or policy with respect to said land or
petroleum oil or gas or oil therein either as set
forth in the bill of complaint of otherwise or at all.
But, on the contrary, defendant alleges that the
entry of his predecessors in interest upon said land
and their and his entry thereupon and the develop-
ment of said land for mineral was directly pursuant
to and because of the invitation and encouragement
so to do by the plaintiff and by virtue of the long
established and continued policy of liberality by the
Government, the plaintiff, towards miners and
others desiring to develop mineral lands of the
plaintiff [75] and acquire title thereto, which said
policy, invitation and encouragement defendant al-
leges has existed continuously for more than forty
years. That at and for a long time prior to the
time of the promulgation of the withdrawal order
of September 27th, 1909, it wras universally under-

88 The United States of America vs.

stood and it was the custom and rule of miners in
California and elsewhere on the Pacific Coast that a
valid petroleum and oil placer claim was obtained
by entering upon and taking possession of land
claimed to be petroleum land and causing notice of
location to be filed with the recorder of the county
in which the land was situated and by commencing
actual work for the development of said land and
claim at any time within one year after making, post-
ing and filing of the notice of location and perform-
ing annual assessment work to the extent of $100.00
per year thereafter until discovery, all of which
customs wTere wTell known throughout the Pacific
Coast and in the United States of America, and
had been invoked continuously for a period of more
than forty years prior to the date of said order
of withdrawal, which facts and customs and rule
was at all times well known to plaintiff and fre-
quently acted upon and recognized by plaintiff.
That on and prior to January 1st, 1909, and for
more than twenty years prior thereto, and on said
date and at all times since said date, it had been
well established and was the law as to petroleum
placer mining claims that when discovery of oil
or gas should be made upon said claims that said
discovery should relate back to the date of the in-
itial act, to wit: the date of the actual making of
the location. That the said policy was acquiesced
in and adopted by the Government of the United
States [76] and that many hundreds of patents
have been issued prior to the date of the commence-
ment of this suit over a period of more than forty

California Midway Oil Company ft al. B9

years based upon the custom and rides and law
hereinbefore referred to; that at the time of the
location mentioned in the complaint herein the
policy, invitation and encouragement of the plain-
tiff above mentioned concerning its lands in Cali-
fornia and the development thereof and the said
custom and rule of miners and the said law above
referred to as to discoveries and the disposition of
the mining lands of the United States had become
so well settled and known and had been continuously
and repeatedly and without objection acted upon by
both the plaintiff and its citizens for such a long
period of time prior to September 27th, 1909, that
on said date the said policy, invitation, encourage-
ment, mining customs and laws had become a rule
of property and wrere thereafter by Act of Congress
approved June 25th, 1910, entitled "An Act to
Authorize the President of the United States to
Make Withdrawals of Public Lands in Certain
Cases," expressly recognized and reiterated by the
making of the President's order of temporary with-
drawal dated September 27th, 1909, wholly in-
operative as to the lands described in the bill of
complaint in this suit.

FIFTH DEFENSE.

For further answer and defense herein this de-
fendant without re-engrossing alleges all of the
averments and makes all of the denials hereinbefore
set forth, and also further alleges:

That at and before the commencement of this
action defendant alleged and claimed and still al-
leges and claims that he was in and was entitled to

90 The United States of America vs.

the possession of the " defendant's forty (40)
acres" of the quarter section of land described in
the complaint [77] herein and to no more there-
of than the " defendant's forty (40) acres," which
said fact at the time of the commencement of said
action and for long prior thereto was well
known to the plaintiff herein; that said defendant
does not now have and never did have and never
did assert any right, claim or interest in or to or
possession of the other part of said quarter section
or any part thereof.

That the defendants, J. M. McLeod, Standard
Oil Company, Associated Oil Company, Columbus
MidwTay Oil Company, Thirty-two Oil Company,
California Midway Oil Company, have not nor has
either or any of them any right, title or interest
in or to or possession of the said " defendant's
forty (40) acres" of said quarter section, and that
said defendants other than the Columbus Midway
Oil Company do not and never did, either subse-
quent to or before the commencement of this action,
assert any right to the said " defendant's forty (40)
acres" of the said quarter section or any part there-
of or lay any claim thereto, of any kind, char-
acter or description, or to the possession thereof
or any part thereof which, said facts were well
known to the said plaintiff herein at the time of the
commencement of this action.

That this defendant has not and never did have
any interest with the said other defendants named
herein or any of them in any part of said land de-
scribed in the complaint herein; that this defend-

California Midway Oil Company et al. 01

ant was not interested with the said defendants
above named or any of them in any gas heretofore
extrated from said land described in the complaint
or any thereof or which might hereafter be ex-
tracted from said land or in any oil or other min-
eral heretofore extracted from the said land or any
thereof or to be extracted from the said land or any
thereof, [78] all of which facts herein asserted
were well known to the plaintiff at the time of and
before the commencement of this suit.
SIXTH DEFENSE.
For a further and separate defense this defend-
ant without re-engrossment alleges all of the aver-
ments and makes all denials hereinbefore set forth
and alleges:

That on the 27th day of September, 1909, the
President of the United States signed and promul-
gated as such President an order which, with the
exception of the accompanying lists therein referred
to, is in the words and figures as follows, to wit :
"TEMPORARY PETROLEUM WITHDRAWAL

No. 5.
"In aid of proposed legislation affecting the
use and disposition of the petroleum deposits
on the public domain, all public lands in the
accompanying lists are hereby temporarily
withdrawn from all forms of location, settle-
ment, selection, filing, entry, or disposal under
the mineral or nonmineral public land laws.
All locations or claims existing and valid on
this date may proceed to entry in the usual
manner after field investigation and examina-
tion."

92 The United States of America vs.

That in the lists accompanying said order of
withdrawal the land described in paragraph II of
the bill of complaint herein was included.

That there existed previous to and on the 1st day
of January, 1909, and at all times subsequent to
said date in the State of California and in the Mid-
way Mining District, in which said mining district
the said land is and always has been situate, miners'
regulations and rules and customs governing [79]
the location, manner of recording and amount of
work necessary to hold possession of placer mining
and all oil, gas and petroleum mining claims within
said district.

That under said regulations such mining claims
could be located within said district by distinctly
marking the location on the ground so that the
boundaries thereof could be readily traced and by
posting a notice of location in a prominent position
upon the ground located as such mining claim and
by recording a duplicate of the said notice of loca-
tion in the office of the recorder of the county in
the State of California in which the land located
upon was situate, to wit: Kern County, California,
and by prosecuting upon said mining claim work
leading and tending to the discovery of oil or gas
on or in the ground described in the notice of loca-
tion.

That the said Midway Mining District at all the
times mentioned herein was in said Kern County.

That in the year 1909 and previous to the 27th
day of September, 1909, the predecessors in interest
of this defendant had located all of the land de-

California Midway Oil Company el ul. 93

scribed in the bill of complaint according to the
provisions of the mineral land laws of the United
States and the rules, regulations and customs of

miners of the district in which said land was situ-
ate for and as a placer claim for the purpose of
developing petroleum and other minerals thereon

and therein and that the said land was then duly
and legally located by the persons named as loca-
tors in the bill of complaint herein.

That the said location was made by marking on
said land the boundaries of the quarter section de-
scribed in the bill of complaint so that the same
^ould be readily traced and a notice of said location
was posted upon the ground and a copy of said
[80] notice was immediately filed for record in
the office of the recorder of the county of Kern,
State of California.

That defendant is informed and believes, and
therefore alleges the fact to be, that from on or
about the 1st day of January, 1909, the said loca-
tors or someone in their interest or the successors
of said locators and the predecessors in interest of
this defendant in accordance with law and the regu-
lations and in accordance with the then well known
and existing local customs and rules of miners in
said district began to and did diligently and contin-
uously prosecute work on said mining claim lead-
ing and tending to a discovery of oil and gas upon
the said mining claim, described in the complaint
and said work leading to and tending to a discovery
was continuously and diligently performed until
the discovery of oil and gas on said claim.

94 The United States of America vs.

This defendant alleges the fact to be that at the
time of the signing and the promulgation of the
said order by the President of the United States
the predecessors in interest of this defendant did
have and then owned an existing and valid loca-
tion and claim to said land within the meaning of
the said order of withdrawal.

Defendant avers that from the 1st day of Janu-
ary, 1909, defendant's predecessors in interest in
said mining location herein mentioned and said
defendant's predecessors in interest and their suc-
cessors in interest in said mining location herein
mentioned and said defendant have been in the
continuous and actual occupancy of the said land de-
scribed in the bill of complaint herein.

Defendant avers that by reason of the foregoing
facts the said land described in paragraph II of
said bill of complaint [81] at the date of the
signing or promulgation of the said order of with-
drawal and for a long time prior thereto and since
said September 27th, 1909, has not been and was
not " public land" within the meaning of said term
as employed in the said order.

SEVENTH DEFENSE.

That for more than six years prior to the begin-
ning of this action this defendant and his predeces-
sors in interest have been in the lawful and peace-
able possession of the "defendant's forty (40)
acres" of the quarter section of land described in
the complaint, and that the predecessors in interest
of said defendant and their successors in interest
have been in the lawful and peaceable possession

California Midway Oil Company et ah 95

of the land described in the remaining* half of
said quarter section of said land, and that for more
than six years last past the said land or some part
thereof has been continuously worked by said de-
fendants and their predecessors in interest as a
mining claim without objection, let or hindrance on
the part of the plaintiff or anyone else or any
attempt being made or notice given to either or any
of said defendants during said period of five years.

That for more than six years prior to the com-
mencement of this suit the plaintiff has been fully
informed and has fully known and has been fully
advised of said occupation and working of the said
land as aforesaid by the defendants and the pre-
decessors in interest of the said defendants, and
that at the time of the commencement of this suit
and for more than six years prior thereto and prior
to September 27th, 1909, there had been and the
plaintiff at all times wrell knew that there had been
an inception of development on said land. That
by reason of the foregoing the plaintiff is and ought
to be estopped from maintaining this action. [82]
EIGHTH DEFENSE.

And for a further answer and defense herein the
defendant refers to and by such reference without
re-engrossment alleges all of the allegations and
makes all denials hereinbefore set forth and does
hereby further allege:

That on September 27th, 1909, and long prior to
said date the defendant's predecessors in interest
were in the actual possession and occupation of

96 The United States of America vs.

the real property described in the bill of complaint
and on said 27fh day of September, 1909, there
was and had been an inception of development work
by defendant's predecessors in interest. That on
said date defendant's predecessors in interest were
in the actual occupation and possession of adjacent
and adjoining land to the land described in the
complaint and all of which land had been located
for oil, gas or other mineral as placer mining claims
and that the said defendant's predecessors in in-
terest or their successors were operating said land
described in the bill of complaint and the land ad-
jacent and contiguous and adjoining thereto as one
enterprise so far as development of said land was
concerned on and long prior to the said 27th day
of September, 1909. That the land described in the
complaint and said other lands were then being
held under locations as placer claims by the locators
mentioned in the bill of complaint herein and other
locators, all of whom were citizens of the United
States and who duly located the said land pursu-
ant to the laws of the United States, its rules and
regulations, and the rules, regulations and customs
of miners of the Midway Mining District in the
county of Kern, State of California, in which Dis-
trict, County and State said lands were and are
situate. [83]

That said predecessors in interest of this defend-
ant never abandoned the said land or the mining-
locations thereon and thereof and that prior to the
said 27th day of September, 1909, there had been
duly filed in the office of the recorder of the county

California Midway Oil Company et al. 97

of Kern, state of California, by the said locators

mentioned in the bill of complaint herein notices
of the location of said lands for and as placer min-
ing claims as aforesaid and that ever since the mak-
ing and filing of said locations and up to and in-
cluding the 4th day of August, 1910, the predeces-
sors in interest of this defendant under said min-
ing locations and their successors have been in the
actual and full and undisputed occupation of said
lands under said mining claims and on the said 27th
day of September, 1909, as this defendant is advised
and believes, and therefore alleges the fact to be,
were by themselves or their agents diligently and
continuously operating the said land described in
the complaint and other lands adjoining and ad-
jacent to said lands to the end that discovery of oil
or gas should be made upon the land described in
the bill of complaint herein and that said opera-
tions continued without interruption until the " de-
fendant's forty (40) acres" of said land described
in the bill of complaint herein was conveyed to de-
fendant herein and until the defendant herein was
let into the possession of said land and until dis-
covery of oil which was made on the mining claim
described in the complaint herein.

That on said 27th day of September, 1909, and
prior to said date and at all times intervening from
said date up to the conveyance of said property to
this defendant and up to the delivery of the posses-
sion of the said "defendant's forty (40) [84]
acres" of said land described in the bill of com-
plaint herein by defendant the Columbus Midway

98 The raited States of America vs.

Oil Company to this defendant the plaintiff herein
was fully informed as to the said land and as to
the said adjacent lands and as to all thereof and
as to the possession thereof as herein alleged and
as to the development thereof, and the said plain-
tiff at all times well knew that the said lands were
occupied by said locators and in their behalf and
well knew that work had been and was being done
by the defendant's predecessors upon the said land
described in the complaint herein and the other
lands hereinbefore mentioned adjacent thereto by
the defendant's predecessors and their successors,
all of which work was leading to the discovery on
the land described in the complaint herein of oil
and gas ; and said plaintiff well knew and was fully
and completely informed and advised as to all other
facts alleged in this entire answer.

Defendant alleges that he is informed and believes
and therefore alleges the fact to be that the plain-
tiff herein caused the said land described in the bill
of complaint herein and the said adjacent land
above mentioned, alleged herein to have been oper-
ated as one enterprise by the predecessors in in-
terest of this defendant and the successors of said
predecessors in interest to be closely and repeatedly
examined prior to September 27th, 1909, and there-
after during the years "1909" and "1910," and fre-
quently thereafter until commencement of this suit.

Defendant alleges that at all times mentioned
herein and at all times subsequent to the 27th day
of September, 1909, and up to and until the com-
mencement of this suit said plaintiff was fully aware

California Midway oil Company et al. 99

of all work being had and done upon the said land
described in the complaint herein and upon other
land [85] contiguous and adjacent thereto and
of the claim of the said locators and their suc-
cessors in interest as to the work being done upon
said lands.

That at the time of the making of the locations
of the said lands for and as placer mining claims

and of all thereof, including the land described in
the complaint herein, the said lands were arid and
waste lands and did not equal in value the sum of
$2.50 per acre.

That for more than six years prior to the bring-
ing of this action plaintiff had full and complete
notice and knowledge that the said land described
in the complaint herein was in the possession of the
defendant and the defendant's predecessors and
their successors and that they were drilling thereon
for the production of oil and gas therefrom and were
in fact producing, selling and disposing of oil and
gas from said land.

That the defendant's predecessors, the said loca-
tors and the successors of said locators from and
including the year "1909" and at all times up to
the commencement of this suit and for more than
six years before the commencement of this suit
were continuously expending large sums of money
upon the said land described in the complaint herein
and the development of the lands adjacent thereto
and the said enterprise above mentioned for the
production of oil and gas from each and all of said
mining claims.

100 The United States of America vs.

That upon the particular mining claim mentioned
and described in the complaint herein there was
expended many tens of thousands of dollars in the
construction of wells, laying of pipe-lines, telephone
and telegraph lines, tanks, wagon roads, buildings,
tools and equipment, all of which was done openly
and publicly by the said defendant's predecessors
in [86] interest and with the full knowledge and
the full continuous knowledge of the said plaintiff
herein.

That never at any time prior to the commence-
ment of this suit was any demand made upon the
said locators of said mining claim or upon any per-
son in the possession of the same or any part there-
of or of any of said adjacent lands for the posses-
sion thereof by the plaintiff or any one in the plain-
tiff's interest, and never at any time prior to the
commencement of this suit was any notice, written
or verbal, given by the said plaintiff or any of its
officers to this defendant or to the predecessors in
interest of this defendant or to the said locators
or to the successors to the interest of said locators
to said lands or any thereof to cease operations
upon said land or to remove therefrom any im-
procements, buildings, tools or equipment or to
cease laying pipe-lines, telephone and telegraph
lines or wagon roads across or through the said
lands or any thereof; nor was any notice of any
kind given to the said defendant or to the prede-
cessors in interest or successors of said locators that
they were expending said large sums of money upon
said land at their peril or without recognition of

California Midway oil Company et al. 101

their rights or claim by the said plaintiff, nor was
any notice ever given by said plaintiff to this de-
fendant or to his predecessors in interest or suc-
cessors of said locators or to any of them that the
said claims of the said locators or of this defend-
ant's predecessors in interest or the successors of
defendant's predecessors in interest were not the
holders of a location upon the said land or of a
valid and existing claim or location upon said land
at the time of the making of the withdrawal order
in this answer hereinbefore referred to, nor was
there any notice at any time subsequent [87] to
said 27th day of September, 1909, or at any time
prior thereto given to this defendant or the defend-
ant's predecessors in interest to the effect that the
plaintiff disputed the said rights of this defendant
and his predecessors in interest in and to the said
land nor was there ever any demand made upon said
defendant or his predecessors in interest on or sub-
sequent to September 27th, 1909, that they desist
from proceeding with development work upon said
land or any thereof herein mentioned or the land
described in the complaint herein or any part there-
of, nor was any demand made upon the said de-
fendant or any of his predecessors in interest at
any time prior to the commencement of this suit
for the delivery to the plaintiff of any mineral pro-
duct, oil or gas or any product taken from the said
land or produced upon the said land, nor was any
notice ever given to this defendant herein or his
predecessors in interest not to market or dispose of
any oil, petroleum or gas or other mineral produced

102 The United Stairs of America vs.

or extracted or taken from the said land, nor was
any notice of any kind, character or description at
any time given by the plaintiff prior to the com-
mencement of this suit that the plaintiff claimed
subsequent to September 27th, 1909, that the posses-
sion of this defendant and his predecessors in in-
terest were in anywise contrary to law or that the
said possession was not under a fully recognized
location and valid and existing claim.

That the said plaintiff at all times knew ever since
the 27th day of September, 1909, that the said de-
fendant's predecessors and the successors of defend-
ant's predecessors were expending large sums of
money upon the said land and creating a value to
the said land and to adjacent lands belonging to
[88] the Government of the United States.

That the plaintiff and its officers well knewr that
this defendant and this defendant's predecessors
in interest were relying upon the assent and acqui-
escence of the plaintiff in the occupation and im-
provement of the said land and the production from
the said land and particularly the land described
in the complaint herein of oil and gas.

That the plaintiff well knew at all times that the
defendant's predecessors in interest and their suc-
cessors in interest were expending large sums of
money upon said land relying upon the acquiescence
and assent hereinbefore set forth; that the plain-
tiff well knew that the defendant's predecessors in
interest were maintaining and claiming and assert-
ing that they were making said improvements and
proceeding to the further development of the said

California Midway Oil Company el al. 103

land and improvements thereon to the extent of
many hundreds of thousands of dollars upon the
understanding that defendant and his predecessors

in interest had accepted an offer of the plaintiff
herein to purchase the said laud as proffered by the

United States of America.

That for more than six years prior to the com-
mencement of this suit and eon tinning from Octo-
ber, 1910, with the full knowledge and acquiescence
of the plaintiff herein, this defendant's predecessors
in interest and their successors did expend upon the
land described in the complaint herein and for the
improvement thereof and in work leading to the dis-
covery of oil and gas thereon many tens of thou-
sands of dollars and did pay for the purchase of the
said land to the sellers thereof many tens of thou-
sands of dollars, all of which was freely and openly
spent without secrecy and with full knowledge to
the general public and to the plaintiff. [89]

That all of said expenditures were made in good
faith and in reliance upon the offer of the United
States to dispose of and sell said lands, and fully be-
lieving in the representations made by the said loca-
tors hereinbefore set forth and fully believing and re-
lying upon the fact that there was in fact an inception
of development upon the land described in the bill
of complaint herein and upon all of the lands de-
scribed in the other actions hereinbefore referred to
and that the predecessors in interest of this defend-
ant at the time of the withdrawal hereinbefore men-
tioned were in the actual possession of said land and
that up to the time of the delivery of possession to

104 The United States of America vs.

the defendant by his predecessors in interest and that
the said predecessors in interest were in the full and
undisputed occupation of said land and all thereof
and had commenced to and were diligently continu-
ing work leading to the discovery of petroleum and
gas upon the land described in the bill of complaint
herein and other of said lands, and in fact believing
that the said locators had a full and unquestioned
and valid and existing claim to said land under the
laws of the United States and that the same was
fully recognized by the United States and its officers,
and believing that the said plaintiff had fully acqui-
esced in the said claim as to development work,
occupancy, right to occupancy of and the possession
of said land and all thereof and had fully assented
and acquiesced in the continuance of occupancy and
possession of said land after the order of withdrawal
of September 27th, 1909, and believing that the said
plaintiff had recognized and was recognizing and
had completely acquiesced in the claim of the def end-
ant 's predecessors in interest that they had an in-
ception of development and that they had a valid
and existing claim to the said land [90] at the time
of and after said alleged withdrawal, and also that
the said locations were valid and existing locations,
and relying upon the said acquiescence and assent of
the Government, plaintiff herein, this defendant did
take title to said property last described.

That the plaintiff herein at no time made objection
prior to the commencement of this suit to the mining
of said land by this defendant's predecessors in inter-
est or their successors to the removal from said land

( '<ii M 'i'i i < t <ri. 105

and the disposal of the oil and gas produced From and
mined upon said land: and by the payment during
said period of large Bums for taxes levied against

said land and the improvements thereon and the pro-
duct taken therefrom and also larj

_ inst said defendant's pm in interest by

•n of the ownership of said lands for the general

d of oil lands in said district including

lands owned by plaintiff.

That during all of the period of time that the said
adant and his predi - in interest were in

-aid land described in the bill of com-
plaint herein and other lands hereinbefore referred
to the said defendant's pre-: rs in interest and

their successors did expend large sums of money in
are and protection of said land and in the pre-
servation of the product obtained from the said land;
that had the said defendant's pred rs failed to

so do many hundreds of thousands of dollars in min-
eral products and lands would have gone to waste
all of which facts were known to the plaintiff while
this defendant's pred- - in interest were so pro-

tecting and preserving the said land and the products
therefrom and therein; and this defendant alleges
that frequently, subsequent to the said withdrawal
order of September 27th, [91] 1909, the said land
described in the bill of complaint herein and other
lands referred to in this answer and the work being
performed thereon by this defendant's predecessors
in interest were visited by the plaintiff herein, its
officers and agents, and the said plaintiff never at any-
time in anywise objected or in any manner protested

106 The United States of America vs.

to said defendant or its predecessors in interest or
objected to the operation of said land or to the im-
provement thereof or to the removal or marketing
therefrom of any of the product from said land of
either oil or gas.

That, on the contrary, this defendant is informed
and believes and therefore alleges the fact to be that
the said acts of the defendant's predecessors in the
development, occupancy, and possession of said land,
and disposition of the proceeds therefrom were fully
approved, acquiesced in and assented to by the said
plaintiff herein and no objection of any kind, charac-
ter or description was ever made by the said plaintiff
to the operation, maintenance, improvement and care
of said lands by defendant, its predecessors in inter-
est or their successors.

This defendant further alleges that for the years
1911, 1912, 1913, 1914, 1915, and 1916, this defendant
and his codefendants made report and return to
the plaintiff herein as to their respective incomes for
all years from the year "1911" until the filing of the
bill of complaint herein and that in all such reports
and returns there was included all proceeds by this
defendant 's predecessors in interest herein from the
sales of oil and gas obtained from the land described
in the bill of complaint herein; that this plaintiff
well knew that this return and report included the
income of this defendant's predecessors in interest
an successors derived from the sales of oil and gas
extracted and produced from the land described
[92] in the bill of complaint herein and the said land
adjacent thereto, and said plaintiff so well knowing

California Midway Oil Company et al. 107

the facts herein stated during cadi and all of said
years did levy and assess a tax upon the incomes of
each and all of the defendants and including a tax
upon the income received by this defendant's code-
fendants from the sales of oil and gas produced from
the land described in the bill of complaint herein.

This defendant further alleges that this defend-
ant's codefendants herein, as he is informed and be-
lieves and therefore states the fact to be, did, pay to
the said plaintiff said taxes so levied and assessed
upon said income derived from the sale of oil and gas
produced and extracted from the land described in
the bill of complaint herein and said adjacent land
and said taxes were received by plaintiff herein, with
plaintiff's full knowledge of the facts herein stated
during each and all and every of said years.

This defendant further alleges that the said plain-
tiff demanded the payment of said income tax from
this defendant's codefendants; and this defendant
further alleges that had the plaintiff not levied said
tax and not demanded the payment of said tax and
had it refused to accept the payment of said tax upon
the ground that the said assessment was erroneous
or illegal or upon the ground that the said defend-
ants were not entitled to the income from or pos-
session of said land or lands, the said taxes would not
have been paid.

This defendant further alleges that by reason of
the premises and by reason of the facts set forth in
this answer the plaintiff herein is and ought to be
estopped from maintaining this action. [93]

Wherefore, this defendant prays that the plaintiff

108 The United States of America vs.

take nothing by this its suit and that the bill of com-
plaint herein be dismissed.

2. That should the prayer of the defendant that
the said bill of complaint be dismissed be denied, that
this Court do order and direct that this cause be
transferred from the equity to the law side of this
Honorable Court to be there heard and tried by a

jury.

3. And this defendant does further pray that fail-
ing the granting of the relief hereinabove prayed for,
that this defendant do have such other and different
and further relief as equity and good conscience shall
require.

JORDAN & BRANN,
Attorneys for Defendant L. B. McMurtry.

[Endorsed] : B-10. In the District Court of the
United States for the Southern District of Cali-
fornia, Northern Division, Ninth Circuit. In Equity.
United States of America, Plaintiff, vs. California
Midway Oil Company, et al. Answer of Defendant
L. B. McMurtry. Filed Dec. 11, 1917. Wm. M. Van
Dyke, Clerk. By Chas. N. Williams, Deputy Clerk.
Jordan & Brann, Attorneys at law, Monadnock
Building, San Francisco. [94]

California Midway Oil Company et al. 109

In the District Court of the United States for the
Southern District of California, Northern Divi-
sion, Ninth Circuit.

UNITED STATES OP AMERICA,

Plaintiff,

vs.

CALIFORNIA MIDWAY OIL COMPANY,
ASSOCIATED OIL COMPANY, COLUM-
BUS MIDWAY OIL COMPANY, 32 OIL
COMPANY, L. B. McMURTRY, J. M.
McLEOD and STANDARD OIL COM-
PANY,

Defendants.

Decree of Dismissal.
This cause having heretofore been heard and ar-
gued by counsel, and the Court now being fully ad-
vised in the premises, finds that the plaintiff is not
entitled to the relief demanded or any part thereof, —
IT IS THEREFORE ORDERED, ADJUDGED
AND DECREED that the complaint be and is hereby
dismissed.

R. S. BEAN,

Judge.
Dated, June 19th, 1919.

Decree entered and recorded this 23d day of June,
1919.

CHAS. N. WILLIAMS,
: Clerk.

By Ernest J. Morgan,
Deputy.

112 The United States of America vs.

Assignment of Errors.

Now comes the United States of America, the
plaintiff in the above-entitled cause, and files the
following assignment of errors upon which it will
rely in its prosecution of appeal prayed for by it
from the decree of dismissal entered in said cause
by this Honorable Court on June 23, 1919:

The Court erred in dismissing the bill of com-
plaint and said cause, and in entering its final de-
cree so dismissing said bill and cause.

II.

The Court erred in failing and refusing to hold,
adjudge and decree that the plaintiff was and is en-
titled to the relief prayed for by it in its said bill of
complaint, and in failing and refusing to adjudge
and decree that the land described in said bill of
complaint and the contents thereof were the perfect
property of the plaintiff, free and clear of the
claims of the defendants, or any of them. [98]

III.

The Court erred in finding and holding in sub-
stance and effect that the alleged mining location
under which defendants claim was made by or for
the persons in wThose name it was made in good
faith and with the intent on their part to lawfully
acquire said land for their own use and benefit.

IV.

The Court erred in failing and refusing to find
and hold that the alleged mining location under
which the defendants claim wTas made in the interest

California Midway Oil Company et al. 113

of and for the use and benefit of the defendant L. B.
McMurtry, or some person or corporation other
than the persons in whose names such location was
made, to enable said McMurtry, or such other per-
son or corporation, to acquire a greater acreage of
the public mining land than could lawfully be ac-
quired by one person under one mining location.

The Court erred in finding and holding that the
defendants California Midway Oil Company and
Associated Oil Company " acted in the utmost good
faith both in acquiring and purchasing the locators'
interests and paying therefor, without notice,
knowledge or suspicion that there was or could be
any question about the bona fides thereof.' '

VI.

The Court erred in finding and holding in sub-
stance and effect that the defendants California
Midway Oil Company and Associated Oil Com-
pany were innocent purchasers for value without
knowledge or notice of any fraud or irregularity in
the mining location under which they claim, and
that such fact so found by the Court was "a circum-
stance not to be lost sight of in the consideration of
the case" and thus holding in substance and [99]
effect that such purchase by said defendants of the
alleged interests of the persons in whose names such
location was made entitled said defendants to rights
to which otherwise they might not have been en-
titled.

VII.

The Court erred in finding and holding in sub-

114 The United States of America vs.

stance and effect that the powers of attorney under
which the alleged location of the land in suit was
made, and under which the defendants claim, were
executed by the persons whose names appear
thereon, in good faith, for the purpose of lawfully
acquiring for such persons public mineral lands.

VIII.
The Court erred in holding in substance and
effect that the powers of attorney under which the
alleged location of the land in suit was made, and
under wThich the defendants claim, having been exe-
cuted in good faith, any subsequent unlawful use of
such powers of attorney by the agent, L. B. Mc-
Murtry, is immaterial.

IX.
The Court erred in failing to give proper weight
to the evidence showing the circumstances under
which the so-called Chicago powers of attorney were
secured and the locations thereunder made in deter-
mining the bona fides of the alleged locations made
by McMurtry under the so-called New York powers
of attorney, under one of which locations the de-
fendants claim.

HENRY F. MAY,
E. B. LACY,
Special Assistants to the Attorney General,

C. D. HAMEL,
Special Assistant to the United States Attorney,
Solicitors for Plaintiff. [100]

[Endorsed] : No. B-10— In Equity. In the Dis-
trict Court of the United States for the So. Dis-
trict of California, Northern Division. United

California Midway Oil Company et al. 115

States of America, Plaintiff, vs. California Midway
Oil Co. et al., Defendants. Assignment of Errors.
Filed Dec. 15, 1919. Chas. N. Williams, Clerk.
Maury Curtis, Deputy. [101]

In the District Court of the United States for the
Southern District of California, Northern Divi-
sion, Ninth Circuit.

No. B-10— IN EQUITY.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

CALIFORNIA MIDWAY OIL COMPANY,
ASSOCIATED OIL COMPANY, CO-
LUMBUS MIDWAY OIL COMPANY, 32
OIL COMPANY, L. B. McMURTRY, J. M.
McLEOD, and STANDARD OIL COM-
PANY,

Defendants.

Order Allowing Appeal.

It appearing that the plaintiff herein has hereto-
fore filed its petition for an appeal from the final
decree made and entered herein on June 23, 1919,
dismissing its bill of complaint, together with its
assignments of errors, —

IT IS HEREBY ORDERED that said appeal to
the United States Circuit Court of Appeals for the
Ninth Circuit be, and the same hereby is, allowed.

116 The United States of America vs.

Dated this 15th day of December, 1919.

R. S. BEAN,
District Judge. [102]

[Endorsed]: No. B-10. In the District Court
of the United States for the So. District of Cali-
fornia, Northern Division. United States of
America, Plaintiff, vs. California Midway Oil Co.
et al., Defendants. Order Allowing Appeal. Piled
Dec. 15, 1919. Chas. N. Williams, Clerk. Maury
Curtis, Deputy. [103]

In the District Court of the United States for the
Southern District of California, Northern Divi-
sion, Ninth Circuit.

No. B-10— IN EQUITY.

UNITED STATES OP AMERICA,

Plaintiff,

vs.

CALIFORNIA MIDWAY OIL COMPANY

et als.,

Defendants.

Stipulation Re Statement of Evidence on Appeal.

It is hereby stipulated and agreed that the state-
ment of evidence lodged by the plaintiff, United
States of America, with the clerk of the above-
entitled Court on the 18th day of August 1920, may
be approved by the Court or the Judge as the state-
ment of evidence to be included in the transcript on
appeal taken by said plaintiff in the above-entitled

California Midway Oil Company et al. 117

and numbered cause to the United States Circuit
Court of Appeals.
Dated April 4th, 1921.

HENRY F. MAY,
E. B. LACY,
Special Assistants to the Attorney General,

Solicitors for Plaintiff.
HENRY ACH and
EDMUND TAUSZKY,
Solicitors for Defendant, Associated Oil Com-
pany.

ROBT. M. PEASE,
Solicitors for Defendants, J. M. McLeod and
Thirty-two Oil Company,

Apr. 12, 1921. [104]
JORDAN & BRANN,
Solicitors for Defendant, L. B. McMurtry.
GEO. E. WHITAKER,
Solicitor for Defendant, California Midway Oil
Co.
PILLSBURY, MADISON & SUTRO,
Solicitors for Defendant, Standard Oil Company.

U. T. CLOTFELTER,
JORDAN & BRANN,
Solicitors for Defendant, Columbus Midway Oil
Co. [105]

[Endorsed] : No. B-10— In Equity. In the Dis-
trict Court of the United States for the South-
ern District of California, Northern Division, Ninth
Circuit. United States of America vs. California
Midway Oil Company et als. Stipulation Re State-
ment of Evidence. Filed Apr. 22, 1921. Chas. N.

118 The United States of America vs.

Williams, Clerk. By B. S. Zimmerman, Deputy
Clerk [106]

No. B-10 — In Equity. In the District Court of
the United States for the Southern District of Cali-
fornia, Northern Division, Ninth Circuit. United
States of America, Plaintiff, vs. California Midway
Oil Company, Associated Oil Company, Columus
Midway Oil Company, Thirty-two Oil Company,
L. B. MeMurtry, J. M. McLeod, and Standard Oil
Company, Defendants. Statement of Evidence.
To be Included in Transcript on Appeal in the
Above-entitled Cause. Lodged Aug. 18, 1920.
Chas. N. Williams, Clerk. By R. S. Zimmerman,
Deputy Clerk.

Settled and Filed Apr. 22, 1921. Chas. N. Will-
iams, Clerk. By B. S. Zimmerman, Deputy Clerk.
[107]

In the District Court of the United States for the
Southern District of California, Northern
Division, Ninth Circuit.

No. B-10— IN EQUITY.

UNITED STATES OF AMERICA,

Plaintiff,

vs.

CALIFORNIA MIDWAY OIL COMPANY, AS-
SOCIATED OIL COMPANY, COLUMBUS
MIDWAY OIL COMPANY, THIRTY-
TWO OIL COMPANY, L. B. McMURTRY,
J. M. McLEOD, and STANDARD OIL
COMPANY,

Defendants.

California Midway Oil Company et ah 119

Statement of Evidence to be Included in Transcript
on Appeal in the Above-entitled Cause.

This cause came on for trial March 10, 1919.

APPEARANCES:

FRANK HALL, Esq., Special Assistant to the
Attorney General, and CHARLES D. HAMEL,
Esq., Special Assistant to the United States
Attorney, for Plaintiff.

GEORGE E. WHITAKER, Esq., for Defendant
California Midway Oil Company.

HENRY ACH, Esq., and EDMUND TAUSZKY,
Esq., for Defendant Associated Oil Company.

ROBERT M. PEASE, Esq., for Defendants Thirty-
two Oil Company and J. M. McLeod.

Messrs. JORDAN & BRANN, by WALTER S.
BRANN, Esq., for Defendant L. B. McMurtry
and Columbus Midway Oil Company. [108 —

1]
Deposition of L. A. Shadburne, for Plaintiff.

L. A. SHADBURNE, called by plaintiff on
April 4, 1917, testified by deposition as follows:

I reside at 1019 Foster Avenue, Chicago, 111. I
am in the automobile business. Have lived in
Chicago fifteen years. In 1903 I was with the
American Lucol Company of New York. Knew L.
B. McMurtry about thirty years ago in San Fran-
cisco, where I was born and raised. Met him in
Chicago in 1903. I was stopping at the Great
Northern Hotel and met him in the corridor. He
made me a proposition to sell stock for him and

120 The United States of America vs.

(Deposition of L. A. Shadburne.)
I went to work about two weeks before Christmas,
and continued about a year selling stock in the
Oriental Oil Company. Yes, he explained to me
about the land he controlled in California. Q. Did
he ask you to do anything respecting the acquisition
of further lands or more lands in the State of
California? A. I do remember him asking me
to take a paper of some kind and description, any-
how, I can't hardly say, it was some paper that he
had made out, and wanted me to deliver it to
someone, I think it was to this man Dunbar. I intro-
duced McMurtry to Dunbar. Don't think McMur-
try told me the nature or purport of this paper.
No, he didn't say anything about a power of at-
torney being secured to locate oil lands. He wanted
me to deliver it to Dunbar, who was to get some
signatures to it. I knew nothing about its con-
tents. Later I think I got this paper back in the
sealed envelope and mailed it to McMurtry. I never
read the paper and don't know who signed it. I
sent it to McMurtry at his instigation. He was
president of the company, and, if you will pardon
me, it is hard to refresh my memory on these
things, it is so long ago. But I have a faint recol-
lection of him mailing me this paper later, sealing
and giving it to me and telling me to give it to
Mr. Dunbar; and Mr. Dunbar was to get some
signature, and if Dunbar didn't mail it back to him
I was to go out there and get it and mail it to him,
I remember that. I had no conversation [109 —
2] wTith Dunbar about this paper. Think a man

California Midway Oil Company et at. 121

(Deposition of L. A. Shadburne.)
by the name of Love, who was cashier for the
Bowles Live Stock Company at the Stock Yards,
returned it to me. Am not sure who gave it back
to me, but have a recollection of seeing Love when
in there. Don't remember whether I delivered
more than one paper to Dunbar; nor do I know
how many papers were in the envelope I sent to
McMurtry, or who signed them. I was assistant
secretary of the Oriental Oil Company so I could
sign stock for McMurtry; acted only in Chicago.
All I know about the lands the Oriental Company
owned or held under contract or leases is what I
saw in letters and papers that McMurtry had. I
severed my connection with this companw because
McMurtry took all the money and didn't pay us.
The lands held by this company were in the Coal-
inga District. Yes, McMurtry said they held 1,000
acres on which were three wTells, in the Northern
Midway, Midway Valley, or Kern County Valley.
I don't know the description of these lands or the
names of the claims or what became of these hold-
ings. Yes, I had a certain recollection that Mc-
Murtry said he was going to use the papers I took
to Dunbar to take land with. I don't think he had
to tell me what kind of land, because I knew he was
in the oil business. That is what he would be tak-
ing up. He said he intended taking up lands in
Kern and Coalinga — what you call the Midway Dis-
trict, for the Oriental Oil Company with the papers
I took to Dunbar. Yes, my understanding was that
the Oriental Oil Company was to get all the benefit

122 The United States of America vs.

(Deposition of L. A. Shadburne.)

from the execution and use of those papers. No, I

don't think the company did, because I didn't get

any. No, I have never at any time located any

lands.

Cross-examination.
No, I have no recollection of any conversation
with McMurtry in which he mentioned the county,
township or range wrhere these lands were to be
located. [110—3]

Deposition of Charles A. Dunbar, for Plaintiff.

CHARLES A. DUNBAR, called by plaintiff
April 5, 1917, testified by deposition as follows:

Reside in Chicago, and am one of the firm of
Walters & Dunbar, livestock commission mer-
chants; was in the same business in 1903, employed
by the Bowles Livestock Commission Company.
Was introduced to L. B. McMurtry in Chicago 13
or 14 years ago, by Len Chadburn. Had two or
three deals with McMurtry in regard to some stock
in the Oriental Oil Company which Chadburn was
promoting. I didn't buy any stock, but secured
some. McMurtry borrowed $500 from me. At the
time, I didn't know that the Oriental Oil Company
was broke, and he gave me 10,000 shares. Don't
know whether it was as a bonus or security. He
said, "If this company goes right it will make you
rich." The attempt to sell me the oil stock covered
a period of probably six months, possibly a year,
and I assisted him in making some sales on it.
Yes, I am the C. A. Dunbar who signed that power

California Midway Oil Company et al. 123

(Deposition of Charles A. Dunbar.)
of attorney (Plaintiff's Exhibit 9). Am a little
hazy as to the circumstances. As I remember it,
at that time, I was dealing with Mr. Chadburn to
go to California to work for the Oriental Oil Com-
pany, and during our different conversations he
said that there was some — that Mr. McMurtry
wanted to get some signatures to a paper for some
cause, and I have forgotten what it was; I knew
about what it was for. He asked me if I could get
him any signatures, and I told him yes, I could get
him any amount of signatures to any paper he
wanted. Mr. Chadburn came out to the stockyards,
and he said it would be necessary for them to be
signed before a notary public in the office where I
worked. Mr. W. R. Love is a notary public, and
I told Mr. Love that he probably could get a little
extra money by getting those signatures to this
paper and to catch those fellows as they came in
the office, and get them to sign it. And I may pos-
sibly have sent some of them in and probably
brought one or two of [111 — 4] them in; I don't
just remember. Q. Do you remember wThether you
talked to any of those people about signing it?
A. Yes, I think I did talk to some of them, asked
them if they wTould sign a paper Mr. Love had in
there, as a favor to me. Q. Did you make any
explanation to them as to what the nature of the
paper was, or what it was for? A. I don't think
so. Q. Did any of them ask you what it was they
were signing? A. No, not that I remember.

I signed it out of friendship for Chadburn and

124 The United States of America vs.

(Deposition of Charles A. Dunbar.)
McMurtry. Didn't know it amounted to anything.
Had no intention whatever of taking up any public
lands for my own benefit or use. Don't recollect
that McMurtry ever said anything to me about this
paper. Chadburn said he wanted it for McMurtry
to use for the Oriental Oil Company. Don't recall
that he said how it was to be used. Didn't know
my name was to be used in the location of oil lands,
nor did I have any intention of claiming any lands
that my name might be used to locate. Didn't
know I was signing a location of that kind.

Q. Did Mr. Chadburn tell you it was for the
Oriental Oil Company? A. I don't just remember,
but he said he wanted those signatures for Mr. Mc-
Murtry; I liked McMurtry very much, thought
a great deal of him. I was doing that as a per-
sonal favor to Mr. McMurtry. Q. Did you ever in-
tend by signing this power of attorney to acquire
a patent to any public oil lands in the United
States? A. I didn't know that I had any. At that
time I didn't know that I had any right whatever
to oil lands of any kind.

No, no one explained to me what rights I would
have if my name was used by McMurtry under this
power of attorney. I didn't know what lands my
name had been used to locate until they were
described just this moment. Never knew where it
had been used. I heard within the past six months
that it had been used. After having this power of
attorney signed and signing it myself, the next I
heard of this [112 — 5] transaction was last sum-

California Midway Oil Company et al. 125

(Deposition of Charles A. Dunbar.)
mer when a federal agent called on me. Haven't
seen McMurtry since I loaned him this $500, and
don't recall talking with Chadburn or any of the
other signers about it. Remember most of those
whose names appear on these powers of attorney
(Plaintiff's Exhibits 8 and 9), as being around the
stockyards. Mr. Love and I were instrumental
in getting the signatures; I asked some of them to
sign. Took them as they came in the office, wher-
ever we thought a man wTould sign, we asked him.
I didn't explain to any of them just what they were
signing or what the rights would be under the
laws of the United States. I couldn't make any
explanation in that respect at all, because I didn't
know myself. They signed as a favor to Love and
myself more than any other reason. At that time
around the stockyards it was very easy to get a man
to sign his name to a paper of almost any descrip-
tion. There were papers of some kind circulated
through that building every week, even to this day,
asking for signatures. It was formerly our custom
to sign them.

Cross-examination.
I am 42 years of age. In 1903 my salary was
about $250 a month. Have been in my line of busi-
ness for 23 years there in the stockyards. Have
known Love about 20 years. Yes, I have been paid
my $500, and still like McMurtry. Am still friendly
with Chadburn, talked with him a few minutes
yesterday. He told me he had forgotten about hav-
ing signed the paper of that kind out there. Don't

126 The United States of America vs.

(Deposition of Charles A. Dunbar.)
think he gave me any papers; think he gave them
to Love. No, I haven't talked this over with Love;
haven't seen him for six months. He was in Oregon
the last I heard of him. Yes, Chadburn came to me
at the stockyards and talked about getting sig-
natures. Never talked with McMurtry about get-
ting signatures. No, he didn't then owe me money.
This $500 he borrowed after that. Don't think I
talked with him [113 — 6] at the time he borrowed
this $500 about having obtained the signatures.
Didn't ask him what he had done with the powers
of attorney, nor did he tell me. I couldn't say
positively that I asked any of these men to sign
that power of attorney. Don't remember any part
of any conversation with any of them at the time.
Yes, Love was a man of integrity and I wouldn't
ask him to do anything wrong. Didn't think I was
doing wrong. It was simply fulfilling his duty as a
neighbor for anyone signing that paper, would
acknowledge. Don't believe I read the paper ; many
a one I have signed without reading it. Didn't
have that paper in my hands that I remember.
Chadburn told me what he wanted, wanted some
signatures on a paper, and I went with him, as I
remember, to Mr. Love and told him Mr. Love
might be able to get signatures on the paper. He
probably told me what it was. I didn't read it, that
I remember. Don't remember what he told me it
was. Yes, he may have told me it was a power of
attorney authorizing McMurtry to locate oil lands
and mineral lands out west. But I don't remember

California Midway Oil Company et al. 127

(Deposition of Charles A. Dunbar.)
his doing so. Wouldn't say he didn't. Yes, think
he asked me how many signatures I could get, and
I told him as many as he wanted. As I remember,
Love had the paper, and said, "I would like to have
your signature." Don't remember that any of
them asked me its character. Don't remember
whether anyone was present wThen I signed as the
last one, and don't know wThat was done with the
papers after they were signed. No, it is not true
that I mailed them. It is absolutely untrue. I
have no recollection of anything of the kind. As I
remember, Chadburn came out there and got those
papers himself, and paid Mr. Love his notary fees.
Think I have a recollection of seeing Love deliver
the papers to Chadburn. Am quite positive about
that. [114—7]

Deposition of Jesse I. Cunningham, for Plaintiff.

JESSE I. CUNNINGHAM, called by plaintiff
April 5, 1917, testified by deposition as follows:

I live at 7721 Lawrence Avenue, Chicago. Am
clerk for the Illinois Central Railroad. In 1903
I lived in Chicago and was with the Bowles Live-
stock Commission Company, at the stockyards, and
knew C. A. Dunbar. I am the person whose name
appears on that paper (Plaintiff's Exhibit 8).
Don't remember very much about it, talking to Mr.
Love, the notary, at that time, and some bookkeeper
of the Bowles Livestock Company, he kind of
brought it to my mind. I remember the crowd of
men that entered at this time. It happened in the

128 The United States of America vs.

(Deposition of Jesse I. Cunningham.)
Bowles office. Who the party was I don't remem-
ber. I remember Mr. Love asking us in and having
us sign this paper. Don't remember that it was
then explained to us or who signed it. This was all
told to me afterwards. Can't remember at all what
it was for. If I signed it it must have been my
intention to allowr somebody to locate me on public
lands. It must have been explained to me at that
time. I don't know. No, I didn't then know Mc-
Murtry. Met him in San Francisco in November
or December, 1916. Prior to meeting him I had
not learned how many locations my name had been
used in making. I have heard my name was used
in locating 44 acres out there. Never spent any
money in the development of oil or other minerals
upon any lands covered by locations made in my
name. Suppose my intention with respect to the
public lands wThen I signed that power of attorney
was speculation — taking a chance. I expected to
get my share of it, — fifty-fifty, I think it was to be
split, with the man that signed for it. Q1. Was that
Mr. McMurtry or Mr. Love? A. I guess Mr. Mc-
Murtry had Mr. Love have us sign it. Q. Did you
expect to give a part of your interest to someone
else? Mr. ACH. — I object to that as leading and
suggestive. The WITNESS.— Well, we were sup-
posed to go half and half, I think, was all they said.
[115—8]

Mr. HALL. — And you were to go half and half
with whom? A. We was to spend no money at all,
wasn't to give us one cent, one penny at all, just

California Midway Oil Company et ah 129

(Deposition of Jesse I. Cunningham.)

the right of signing our name was the way I
understood it, that was the wTay it came to be signed.
Q. You were to get half of it and someone else was
to get the other half of that arrangement? A. I
suppose the whole thing was divided up and fifty
per cent of the money belonged to the people who
signed and the others that leased the stuff were to
get the other half. Yes. I was willing that this
should be done. David G. Cunningham was my
father, and he is now dead. I heard he signed
this paper, but never saw his signature or talked to
him about it, and cannot remember whether he was
in the room when I signed. It is so far back and
there were so many there I can't remember. He
was a salesman at that time.

Q. The records of Kern County show that on Jan-
uary 1, 1907, there were located, in Kern County,
California, the following placer mining locations on
which yourself and seven others appear as locators,
to wit: The Indiana Claim, embracing the north-
west quarter of section 22; the Iowa claim, em-
bracing the southeast quarter of the southwest
quarter, the south half of the southeast quarter,
and the northwest quarter of the southeast quarter
of section 28; the Harrison Placer Mine location,
embracing the northwest quarter of section 34; the
Modoc Placer Mining Claim, embracing the northeast
quarter of section 20; the Wilgus, embracing the
northeast quarter of section 26; and the Georgia
Placer Mining Claim, embracing the northeast
quarter of section 32, all in township 31, range 23;

130 The United States of America vs.

(Deposition of Jesse I. Cunningham.)
also the Maine Placer Mine, embracing the north-
east quarter of section 9, and the Vermont Placer
claim, embracing the northeast quarter of section 4,
township 32, range 23; did you ever, at any time,
possess any of the lands which I have just de-
scribed'? A. No, sir. No, since January 1, 1907,
I never did any act toward the development of oil
[116 — 9] or other minerals upon those lands, nor
have I ever expended any money for that purpose,
or attempted to convey those lands by deed, lease or
otherwise, or do anything with respect to them after
January 1, 1907. Prior to going to San Fran-
cisco, in 1916, I never had been advised by McMur-
try of anyone as to what disposition had been made
of those mining locations, nor have I ever received
any money from the proceeds of oil or from the sale
or leasing of those lands. Before going to San
Francisco in 1916 I never communicated with Mc-
Murtry or anyone with respect to any right I might
have had in those lands. After signing that power
of attorney, the next I heard about the transaction
was during the summer of 1916, when Mr. Favorite,
an official of the Government, interviewed me at my
home. I then told him wThat I knew about it. No,
I never learned that these lands wTere relocated
January 1, 1909, by McMurtry, as attorney in fact,
for other parties, and I never gave my consent to the
surrender of those mining claims, nor did I, other
than by this power of attorney I signed December
21, 1908, authorize McMurtry to make a deed, dated
April 14, 1908, conveying part of these lands to H.

California Midway Oil Company el al. 131

(Deposition of Jesse I. Cunningham.)
C. Stratton, or to enter into a contract, dated Octo-
ber 8, 1908, with J. M. McLeod, affecting part of
these lands. Prior to going to San Francisco I
hadn't learned that McMurtry, as my attorney in
fact, had allowed those mining locations to lapse
and become of no effect, nor did I ever authorize
McMurtry to cover the lands covered by locations
on which my name appeared with the so-called New
York locators on January 1, 1909.

Cross-examination.
When Mr. Favorite came to my house last sum-
mer he stated his mission and asked me if I had
any interest in lands in California. I told him no.
He then asked me if I ever sent anybody there1 to
draw lands for me or give anybody a power of at-
torney, and I said no. [117 — 10] He then wrote
up some kind of an agreement to that effect and
read it to me and I signed it. I believe he said he
was a notary. No, he didn't show me any papers
or tell me that the records showTed that the names
of Jesse I. Cunningham and David G. Cunningham
had been used by McMurtry to make locations of
lands out there, or what other names had been used.
That is the paper I signed (Defendants' Exhibit 6).
Defendants' exhibit offered and read into this depo-
sition and is as follows:

Defendant's Exhibit No. 6.

" Jesse I. Cunningham, of 7721 St. Lawrence
Avenue, Chicago, Illinois, being sworn says:

"In 1903 I was living in Chicago and was work-

132 The United States of America vs.

(Deposition of Jesse I. Cunningham.)
ing for the Bowles Livestock Commission Co., at the
stockyards in Chicago. My father's name was
David G. Cunningham. He is now deceased.

UI do not have any recollection of anyone ever
having talked wTith me about filing on land or mak-
ing location of land in California, and have no
recollection of ever having given anyone a power
of attorney to locate or file on land for me. I do
not know L. B. McMurtry. I did not know that my
name had been used as a locator on claims in Cali-
fornia, until informed of that fact by Special Agent
Favorite. If I ever signed a power of attorney for
anyone empowering him to make locations of Gov-
ernment land for me, I signed the name without
knowing and understanding the contents of the
paper. And if any locations wTere made in my
name they were made without my knowledge and
without any authority from me.

"J. I. CUNNINGHAM.

" Subscribed and sworn to before me this 9th
day of August, 1916, at 7721 St. Lawrence Ave.,
Chicago, 111.

" J. H. FAVORITE,
"Special Agent."

Yes, during the twenty days I was in San Fran-
cisco, I met some of these Chicago people, among
whom were Morningstar, Rentschler, the two Den-
nisons, Bacon, Lee and Newhof . I talked with them
and found that they, too, had been locators in land
in California, through McMurtry. Some of them
said they had signed powers of attorney. No, I

California Midway Oil Company et al. 133

(Deposition of Jesse I. Cunningham.)
didn't tell them I did not; I told them I didn't re-
member signing it. They tried to refresh my mem-
ory, and brought it out to me. I then recalled cer-
tain circumstances — they brought it back to me in a
faint way. After I returned to Chicago I went over
to [118 — 11] to the yards one day, where I used
to work at the time this signing happened, and I
was talking to Mr. Love, the notary public before
whom we signed; I told him that, and we talked
in a general way about it, and then he brought it
back to my mind. He says, " Don't you remember
the time you came in and we wralked over to that
corner?" and I remembered, because the office is
changed from what it used to be. He said, "We
had that board that we let down." And I had a
faint recollection of the crowd being there. Yes, I
now remember signing some paper at the time men-
tioned. No, at the time I signed Love didn't say
anything to us. C. A. Dunbar was present then,
and four or five of us who were working with the
Bowles Livestock Company. Don't recall who they
were, or whether Dunbar signed. He was a sales-
man for the firm I was working for. Don't remem-
ber who spoke to me about signing, or a single wrord
then spoken. Don't know what was in the paper I
signed or wTho the other signers were. I remember
there was a crowTd there. I have heard so many
things afterwards that I can't say I remember it
myself. Yes, I testified on the stand at San Fran-
cisco that I didn't remember signing that paper,
and that if I did sign such a paper I had no inten-

134 The United States of America vs.

(Deposition of Jesse I. Cunningham.)
tion of taking up oil lands in California or else-
where under the public land laws of the United
States or claim any interest in such lands. No, I
didn't then remember about this fifty per cent in-
terest in any land. Q. Who told you that? A. I
had a faint recollection of it before I testified the
second time; I wasn't so sure about it. * * *
Q. Who told you anything about fifty-fifty? A. It
was not fifty-fifty, exactly. If these lands ever
came to anything he would split, that is the way it
was. Q. Who said that? A. McMurtry. * * *
Q. How do you know he did? A. That is what I
was told. Don't remember who told me. I just
remember the facts in connection with the con-
versation. Don't remember just exactly who, told
me when I signed the [1191 — 12] paper. I have
got a faint recollection of the details at that time.

Q. Where did you get that from? A. It was
just kind of brought back to my mind. Q. Who
brought it back? A. When Mr. McMurtry was
talking about this, signing it, two or three months
ago. I remember somebody said, "It won't cost you
nothing; go ahead and sign it." That is the only
thing I remember distinctly, yes.

Q. Listen, Mr. Cunningham, now. Nobody ever
proposed to you that you should lend them your
name so that they could go out and get more land
from the Government than they were entitled to and
commit a fraud upon the Government, would you
be a party to doing it? A. No, sir. Nobody said
that to me. Q. Nobody ever came to you and said,

California Midway Oil Company et ah 135

(Deposition of Jesse I. Cunningham.)
"Here, let us have your name, somebody wants to
get some land from the Government, more than the
law entitles them to," would you do it? A. No, sir.
Q. Did you ever intend that your name should be used
so that anybody else could go in and get land from
the Government for themselves? A. Not unless I
was equal with them, got something out of it, too.
Q. The truth of the matter is that you now remem-
ber that matter in about this way, isn't it, that in
the hurry and flurry of your business somebody
came along and said, "Here is a chance to make
some money land-locating out in California; sign a
power of attorney, and if anything comes out of it
you may get some money out of it/' isn't that about
the idea? A. Yes, sir. Q. There wasn't any more
or less to it, was there? A. I can't remember; all
that was said about that wras that wTe was to get
something out of it. [120 — 13]

Testimony of William R. Love, for Defendants.

WILLIAM E. LOVE, called on behalf of defend-
ants, testified in open court as f ollowrs :

Reside at Walla Walla, Washington. In Decem-
ber, 1903, I was cashier for the Bolles Livestock
Commission Company, at the stockyards, Chicago,
Illinois, of wirich company I was subsequently a
director and secretary. Was with this company
until two years ago, beginning in 1899, then I re-
signed because of ill health. While there was notary
public for Cook County, Illinois. Never met L. B.

136 The United States of America vs.

(Testimony of William R. Love.)
McMurtry or receive any letter or telegram from
him, or message of any character from any source.
Did not keep any record of my notarial work. Don't
think the law requires it. Knew C. A. Dunbar there
at the stockyards. Had known him about three
years prior to December 21, 1903. Had no personal
acquaintance with man by name of Shadburne.
Never had original powers of attorney (Plaintiff's
Exhibits 8 and 9) in my personal possession. Yes,
they were given to me for my signature as notary.
I was at that time keeping books and acting as cash-
ier. One afternoon this man you call Shadburne and
Mr. Dunbar were out in the outer office talking to
a number of our employees and some outsidemen
about the matter in question. That was the first I
knew of it. I don't recollect stopping my work be-
hind the desk and going out among them, but I do
recollect that the sum and substance of it all wras a
request for powers of attorney to file on land. The
boys laughed and joked about it a good deal. Both
Mr. Shadburne and Mr. Dunbar were standing up
talking to the boys as they sat along the side of the
office. When it came to signing the documents these
men filed by my desk and signed it in front of me on
the counter-projection of the desk outside of the rail-
ing. The next morning Mr. Shadburne was back at
the yards. I remember him as being out in the hall.
I recall Mr. Dunbar coming into the [121 — 14]
office about noon and he and Mr. Shadburne step-
ping up to the end of my desk where I attached my
notarial seal and signature. Mr. Shadburne then

California Midway Oil Company et al. 137

(Testimony of William R. Love.)
offered me or tendered me $15 for my services. I
remonstrated and said it was too much, that I had
never assessed anybody a notarial fee of that size,
but he in turn said that it was right and insisted
upon my taking it. He and Mr. Dunbar left the
desk with the papers. Those things I remember very
distinctly. Yes, I took the acknowledgment of all
these persons whose names appear upon these powTers
of attorney on which my name appears. Don't re-
call hearing Shadburne or Dunbar say anything on
the subject of wrhether the locations, if made, would
ever prove or as to wThether they might prove valu-
able. But I had the impression that this land, if
it be proved valuable, wrould be a good thing for the
boys who were signing the powders of attorney. I
recall the remark of someone in a jocular way about
Mr. Newhoff, that it would be a joke if Sammy had
to go and sit on a sandhill for a couple of months
to prove up his claim. I recollect a man by the name
of Hokan Role, but don't recall meeting him at that
time. But he must have signed the paper or I
wouldn't have acknowledged it. This applies to J.
A. Bacon also. I knew all the people whose names
appear on these powers of attorney, more or less.
Some of them, of course, better than others. But I
do know this — that never in my life have I attached
my notarial seal and my signature to any document
the signatures upon which I did not actually wit-
ness. Don't recall reading the powers of attorney
as I was very busy at the time. Don't recall any
specific statements made by anyone at that time con-

PI • United States i vs.

Testimony I William H. Love.)
ruing this matter, but the general impression was

that if this land was valuable — proved to be valu-
ta— the boys would have the right to soil it — and I
D*t know whether it was thought that any particu-
lar person [122 — 15] would buy it or not.

Cross-examination.

One of these men who signed one of these powers
of attorney was named Pierce, not Price — his name

was R. E. Pierce, not R. E. Price. I knew a Con-
verse there, who is now dead. I don't recall his

initial-. There was A. J. Rowley there. Also W.
.1. Nichols, not Miohals. I never went into the do-
tails iiing the signing of these powers of
attorney. However, I did have, as I said, the im-

that it was filed on land that might be
valuable, and the boys couldn't lose, and they might
make something. That was the - J improssion.

I don't think they thought they would make a whole
lot. Q. Did the boys have the idea there in the con-
versation that you overheard that they would have
* drill oil wells? A. My recollection is that it v. g
ken of as mineral lands. Q. Well, did you get the
im] ssi n that it was gold lands they were dealing
with or — A. My impression was that it was a min-
eral land proposition. Q. And you don't remember
anything having boon said about oil wells or — A. I
dH remember anything said about oil lands. Q
Did you hear anyone attempt to detail to the men
who signed these instruments what their rights were
under the mineral laws of the United State- . A.
\ . g -hat talk was all outside while I was

California Midway Oil Company et ah 139

(Testimony of William R. Love.)
back of the desk working. Think McMurtry's name
was mentioned. I recall that Mr. Dunbar knew Mr.
McMurtry, and that is the connection in which Mr.
McMurtry's name comes to me. 'Don't recall any-
thing being said about McMurtry being an expert in
the oil business or a man who was likely to make
money out of this transaction. Don't recall having
talked with any of these men as to their idea of their
rights in the transaction or the extent of their in-
terest in any location that might be made under this
power of attorney. [123 — 16] Nor do I recall hear-
ing any of them say anything about advancing money
for the development of any property that might be
located. Q. As I understand it, on the contrary, you
heard them say that it would not cost them anything
and they would not be liable for anything; is that
correct? A. I don't recall that. I recall the
thought that they might have to go and sit on it for
a couple of months to get it. Yes, that came about
in jesting over Newhoff. Yes, the boys treated it
in a rather jesting sort of way. I think the boys
felt, however, that if the land later proved to be
valuable they might have to pay some tax fees or
some little things like that. Don't recall hearing any
of them say anything definitely about selling his in-
terest ; but that seems, as I recall it, to have been the
impression, that they might sell it later on. It seems
to me that the information was that they could take
20 acres each. Didn't hear anything said about an
association entry. As I recall it, there were two or
three of these instruments.

140 The United States of America vs.

(Testimony of William R. Love.)

Redirect Examination.

The only Lee I knew was Tom Lee. Don't recall
that his middle initial was H. I don't recall having
asked any of these men to sign this power of attorney.

It may be that I introduced Shadburne to Nettles,
but I didn't know enough about the proposition to
elaborate upon it for anybody to sign it. I may have
introduced Mr. Shadburne, however, to some of the
boys that following morning while waiting for Mr.
Dunbar. [124—17]

Testimony of Charles W. Nettles, for Plaintiff.

CHARLES W. NETTLES, called by plaintiff,
testified February 18, 1919, in open court as follows :

Am a bookkeeper and land salesman for Fresno
Farm Land Company and reside at Kerman, Cali-
fornia. Lived in Chicago in 1902 and was book-
keeper for Charles E. Harding Company, w7hich was
engaged in the livestock business about twelve years.
KnewT Charles A. Dunbar and W. R. Love in 1903.

I am the C. W. Nettles whose name appears on
that power of attorney (Plaintiff's Exhibit 8).
Signed it in the Exchange Building. It was pre-
sented to me by Mr. Love. The only thing he said
was that this gentleman wras to represent different
parties in locating this land. Yes, I mean McMur-
try, if that is the party. Had never known Mc-
Murtry, and I had never before made any location
on public lands, either mineral or nonmineral, and
was not familiar wTith the public land laws. Don't
remember the details of what Mr. Love said. Noth-

California Midway Oil Company et al. 141

(Testimony of Charles W. Nettles.)
ing was said about how many claims would be located.
I didn 't then knowT the number of acres contained in
an association claim. I presume I knew at that time
the interest each person would have in an association
placer mining claim, but don't remember at this time.
Nothing was said by Mr. Love to me as to howT this
matter would be handled, or by whom, and I had no
information as to who would handle this transaction.
Presume there wTas some statement made at that time
as to what my interest would be in any claim that
might be located under the power of attorney, but I
have forgotten wThat it wTas. I do not knowT and did
not at that time have any knowledge as to what I
might receive out of any claims that wTould be located
under this power of attorney. Don't remember that
anything wTas said by Mr. Love as to wThat I might
receive. Had no intention of expending any money
in the development of oil lands and never was asked
to expend any money in the development of any
[125 — 18] oil lands that were located in which my
name appeared as locator.

Q. The records of Kern County disclose that your
name appears with the names of seven others as
locators of the following lands : The northwest quar-
ter of section 34, the northwest quarter of section
20, the northwest quarter of 22, the northwest quarter
of 26, and the northwest quarter of 32, in township
31, range 23, in Kern County, California. When,
if at all, was the first time that you learned that
your name appeared as the locator upon those

142 The United States of America vs.

(Testimony of Charles W. Nettles.)
quarter sections which I have named'? A. Practi-
cally to-day.

After I signed the power of attorney I never made
any inquiry as to what had been done under it and
never received any money or thing of value by reason
of the fact that I executed it or by reason of the fact
that my name appeared upon the location notices
upon these several quarter sections of land. Never
wras requested to consent to any transfer or any
leases of any of these lands and was never advised
by anyone that there had been transfers of leases
of lands upon wThich my name appeared as locator.
I presume that at the time I signed this power of
attorney something was said by Mr. Love as to what
I might get out of the transactions growing out of
such signing but I don't remember what it was. I
signed it because it was expected, I presume, that we
wTould get something out of it, naturally; I didn't
know what I expected to get; presumably that was
in the hands of Mr. Dunbar and Mr. Love; I had
no idea as to what proportion of the proceeds I
might get and don't remember who wTas to determine
that.

Cross-examination.

Q. When you signed that power, Mr. Nettles, did
you sign it in good faith and with honest intent 1

A. I certainly believe so, yes, sir. [126 — 19]

Q. Did anybody at any time ask you before signing
that powrer of attorney, or at the time of signing the
power of attorney, to lend your name so that any
other persons could avail themselves of any rights for

California Midway Oil Company et al. 143

(Deposition of Simon Newhof.)

their benefit under the mining laws of the United

States? A. No, sir. [127—20]

Deposition of Simon Newhof, for Plaintiff.

SIMON NEWHOF, called by plaintiff April 5,
1917, testified by deposition as follows:

Reside at 4015 Calumet Avenue, Chicago, Illinois.
Am purchasing agent at the Union Stockyards. In
December, 1903, was in the ordering and buying
business at the stockyards for myself. I signed
my name to a document and that must be the one
(Plaintiff's Exhibit 8). The only memory I have
of the deal is, Mr. Dunbar is the one that got me to
sign it. I don't recall if Mr. Love was there. Mr.
Dunbar did not explain to me what I was signing.
He explained it in this way, he explained to me —
he called me in, as I remember, my brother I think
was here at the time, and asked me if I would sign
my name to a document. He said it was for a party
that wanted to file on lands. He says, "It is not
wrorth much now, but it might be worth something
some day. It will not cost you anything." I re-
fused to, but he worked on me and I finally signed
my name to the document. I didn't read the docu-
ment. Had I seen what I read over when in Cali-
fornia I would not have signed it. The first time
I read it was when I was in San Francisco. I
signed that paper in Mr. Bowles office, where Mr.
Dunbar and Mr. Love worked. Heard nothing
more about it until Mr. Favorite interviewed me
before I went to San Francisco. Before that I

144 The United States of America vs.

(Deposition of Simon Newhof.)
knew nothing about the location of land in Cali-
fornia in my name, and didn't know about my name
appearing to any document until I was so informed
by Favorite. Never paid a cent to do anything
toward developing oil or other mineral upon any
of these lands. At the time I signed the paper
the proposition was pur to me in this way. I re-
fused to sign it at first, and Mr. Dunbar was coming
after me and wanted me to sign it. I said, "Well,
I will sign it for you." He said, "You ain't losing
anything, it is not costing you anything.; it ain't
worth nothing now; it may be worth something
some day." I done it more for personal acquain-
tance than anything else, personal [128 — 21] ac-
quaintance with Dunbar, and as a matter of specu-
lation. Nobody broached the subject of my putting
up any money, or said anything as to what rights
I would have in each claim that might be located.
No, I didn't then know that I would be entitled to
20 acres out of each claim on which my name ap-
peared. The only thing I knew about it was Mr.
Dunbar explained, to me, said, "Put your name
clown here, and it may be valuable to you some day,"
and that is the only way I came to put my name
down there. There was nothing said at all in re-
gard to anything. Didn't know McMurtry then;
first met him in San Francisco. No, I never con-
sented that McMurtry might surrender whatever
benefits flowed to me by reason of that power of
attorney and relocating those lands in the name of

California Midway Oil Company et al, 145

(Deposition of Simon Newhof.)

other people, and didn't know that it had been done

until I learned of it in San Francisco.

Cross-examination.
No, nobody ever advised me to go out there and
apply for a patent, and I didn't consider that I
would or not. If I w^as a friend of yours and you
had a document and asked be to sign it and I balked
on it, and you had come up to me and would say,
"It will not cost you anything," and you being an
acquaintance, if a person would go ahead and ask
those questions and get around me to sign it, natu-
rally I would put my name down there. I put my
name down as a speculation. Yes, it was for spec-
ulation, and for a matter of friendship also. [129 —
22]

Deposition of Harry B. Rentschler, for Plaintiff.

HARRY B. RENTSCHLER, called by plaintiff
April 5, 1917, testified by deposition as follows :

Have resided at 4329 South 23d Street, Omaha,
Nebraska, since 1916. Prior to that time I resided
in Chicago for 25 years. In 1903 I was selling
cattle for the Bowles Livestock Commission Com-
pany, and knew C. A. Dunbar a long time before
that; also knew W. R. Love. It is my understand-
ing that I signed that power of attorney (Plain-
tiff's Exhibit 8). Remember I signed a paper in
the office there, don't remember the date. Dunbar
brought in this gentleman and introduced him, and
through him I signed it. I have since heard it
was McMurtry. Am not sure. Never met the man

146 The United States of America vs.

(Deposition of Harry B. Rentschler.)
before or since. I hope to get something out of it
some time. That was the conversation. My recol-
lection is it was Dunbar who told me this but am
not sure. The conversation was — I objected to sign-
ing this paper at that time. I remember of mak-
ing the remark, "What do I want to sign a paper
like that for?" and he says, "Why, it will not cost
you anything, and you might get something out of
it some time." That is the way I remember it.
Have no recollection of his telling me how I wTould
get anything out of it or from whom. Never wfas
asked for a cent, nor did I spend a cent. I never
intended to. Have never asserted any right of
ownership to the lands located under this power
of attorney as described and never intended to se-
cure a patent from the United States for them.
Haven't given it a thought that I know of since
the time those papers were signed — in fact, it
slipped my mind. For a while, after it came up,
I couldn't remember anything about it until I got
to thinking over it. No mention was made to me
about this until possibly two weeks before a Govern-
ment official called on me, early last fall. There
was quite a little kidding each other around the
yards about it. I then thought it a joke. I never
had any conversation or communication [130 — 23]
with McMurtry about selling or disposing of those

lands.

Cross-examination.

Yes, it is true that at the time I signed that paper
something was said about its being given for the

California Midway Oil Company et al. 147

(Deposition of Harry B. Rentschler.)
purpose of filing on Government land for a pros-
pective deal, with the hope that it would become
valuable some day. I read the paper and thought
I knew what I was doing. My recollection is that
I knew locations were going to be made for the
purpose of trying to find some oil lands. Don't
remember of any talk as to paying for the lands,
and I understood that it didn't cost me anything.
Q. There was no such talk as that? A. I don't re-
member any. Q. Did you enter into any arrange-
ment at that time with Love or Dunbar, or the
other man that was there, whoever he w7as, that they
could use your name for the purpose of taking up
lands for themselves? A. No, it wras this here gen-
tleman that was with Dunbar, that Dunbar brought
into our office — Q. I want to know from you
whether you agreed with anybody that they should
use your name to get more land from the Govern-
ment than they themselves were entitled to? A. I
did, when I signed this paper, the way I remember
it, because they would be locating lands in my
name, that is my understanding. Q. It was for
your benefit? A. I understood I would benefit
from it. No, I never intended to give anybody a
chance to defraud the Government. [131 — 24]

Deposition of Franklin H. Denison, for Plaintiff.

FRANKLIN H. DENISON, called by plaintiff
April 5, 1917, testified by deposition as follows:

Reside at 6229 Ellis Avenue, Chicago. Am
cashier for the Globe Rendering Company. Have

148 The United States of America vs.

(Deposition of Franklin H. Denison.)
lived in Chicago more or less since 1871, and was
there during December, 1903, in the same employ-
ment as now, in the Exchange Building, Union
Stockyards. Knew C. A. Dunbar, who was a live-
stock cattle salesman for the Bowles Livestock
Commission Company, and W. R. Love, who was
secretary and bookkeeper for the same company.
Presume I am the F. H. Denison whose name ap-
pears on that power of attorney (Plaintiff's Ex-
hibit 8). I remember very vaguely executing such
a document. As near as I can determine — this
is a long wThile ago. I was an acquaintance of
Charley Dunbar, and at his suggestion and the
suggestion of Mr. Love I signed those papers. I
presume I read it. Don't think I ever put my
name to a paper without glancing over it. Can't
remember exactly what was in those papers at the
time. My impression now is that I was informed
that this man wanted to locate lands out there,
that they might become valuable at some time, and
if they ever amounted to anything we would get
our share. There was no explanation as to what
my share would be or how many claims would be
located in my name. Can't tell you who the man
was wrho was to make the locations for me. Yes, I
assume it was L. B. McMurtry, but am not positive.
No, at that time I had no intention of spending any
money in development or discovery of oil or other
mineral on any lands that might be located in my
name or to secure a patent from the United States.
Think it was represented to us that there would

California Midway Oil Company et al. 149

(Deposition of Franklin H. Denison.)
be no expense to us or the signers. If there was
any expense of that kind Mr. McMurtry or whoever
this man was would pay it himself. Am positive
it was represented to us that we would be under
no obligation. No explanation was made to me as
to what my rights would be [132 — 25] under
each location, and I didn't then know. Don't think
I ever heard of the transaction until the officials
of the Government were looking for some of the
parties who gave their power of attorney to this
man. I had forgotten about it. This official didn't
see me in Chicago and I didn't see any Government
officer about it until I arrived in San Francisco on
subpoena in November, 1916, at which time I first
learned that my name had been used as a locator
upon oil land by McMurtry. Have never claimed
any interest in the lands located in my name, which
have been described, or exercised any act of owner-
ship over them. Never knew until this case came
up that I had anything to claim. If there is any-
thing there I want it. Never authorized McMurtry
to surrender any right I might have had in those
lands.

Cross-examination.
Q. You knew that you had signed a paper by
wrhich it was intended that some agent in Califor-
nia might locate some oil lands? A. At that time
I didn't know there was any oil lands. I thought
it was homestead rights, and have been of that
mind since. No, in signing that paper I didn't
intend to perpetrate a fraud for the benefit of any-

150 The United States of America vs.

(Deposition of Franklin H. Denison.)
body. At the time it was represented to me and
was my understanding that I would have no costs
to pay; but if he had represented to me that there
was something there by my putting up a little
money I would have put it up.

Redirect Examination.
Never was advised that it w^as necessary for me
to put up any money to develop those lands or
that they wrere valuable oil lands prior to Novem-
ber, 1916, when I was in San Francisco. [133 — 26]

Testimony of Bert S. Denison, for Plaintiff.

BERT S. DENISON, called by the plaintiff De-
cember 7, 1916, testified in open court as follows:

Am 38 years of age, a bookkeeper, and reside at
Freewater, Oregon. In December, 1903, was a
bookkeeper for the Bowles Live Stock Commission
of Chicago. Yes, I signed that powTer of attorney
(Plaintiff's Exhibit 9), there in the office before
Love, as a favor to Charlie Dunbar, who worked
for the firm. He said this Mr. McMurtry wanted to
locate some land, and he needed some people to give
him a power of attorney, and asked me if I,
amongst others, would be one of them, and I said
I would. Nothing wras said as to what my interest
would be in any lands that might be located, and I
had no understanding or knowledge as to that.
Had no intention of claiming a one-eighth interest
in any lands located in my name or expending any
money for development, and have never claimed
any such interest.

California Midway Oil Company et al. 151

(Testimony of Bert S. Denison.)
Cross-examination.
May not have known all of those who signed
this power of attorney, but knew most of them and
they were of good repute. Nothing Dunbar said
led me to doubt the good faith of the transaction.
Did not know McMurtry was to locate oil lands in
California under that power of attorney, but knew
he was to locate lands — that was all that was said.
No, I didn't think I was going to deceive anybody,
but thought the transaction was just what it ap-
peared to be. Didn't intend to empower anyone
else to take from the Government anything they
or I might not be entitled to. Knew it might be
used on Government lands anywhere. No, did not
expect to forego any right that transaction might
give me. Yes, if there was anything in the trans-
action that was lawfully mine I expected to have it.
Yes, Dunbar represented that something might
come out of it. He said, "Some day it may amount
to something." Expected that if it did I [134 —
27] would have the benefit. Supposed it was all
right or Dunbar would not have asked me to sign,
believe there were four or five in the office at the
time, but can't say who. I believe Dunbar brought
in four or five men with him. Yes, it was all open
and aboveboard.

Redirect Examination.

Heard nothing about this power of attorney until

about three months ago Mr. Love wrote me that the

Government was looking it up and that I might try

to refresh my memory. Don't know McMurtry

152 The United States of America vs.

(Testimony of Bert S. Denison.)
and have never since talked with Dunbar or any
other of my associates about it. Have never
claimed any interest in the Missouri claim located
January 1, 1909.

Recross-examination.
No, never heard of the Missouri claim. Yes, if
it had in fact been located lawfully under this
power of attorney I would have expected to get the
benefit of it in accordance with my original under-
standing, [135—28]

Deposition of Guy A. Morningstar, for Plaintiff.

GUY A. MORNINGSTAR, called by plaintiff
April 6, 1917, testified by deposition as follows:

Reside in Chicago, and am employed by Cochran
& Hanniberry, at the Union Stockyards. In De-
cember, 1903, was doing yard work for the Bowles
Livestock Commission Company. W. R. Love was
their bookkeeper, and I knew him. Have a faint
recollection of signing that paper (Plaintiff's Ex-
hibit 8). No, I had no intention of spending any
money in the development of oil lands or gold min-
ing lands, and didn't figure on getting any reward
for signing that power of attorney. Didn't hear
any more about this until Mr. Favorite called on
me about six w^eeks ago. Never claimed any inter-
est in the lands described, which my name was used
to locate.

Cross-examination.

Don't pretend to remember all that was said when
I signed. All I remember is just what I said
there, might realize something out of it some day.

California Midway Oil Company et ah 153

(Deposition of Guy A. Morningstar.)
Yes, I formerly testified: "It seems as though Dun-
bar— well, at that time Dunbar was working with
the same concern, and he was looking for some of
them to sign some papers, and they brought them
in the office there, and an argument came up in
regard to why we should sign them; and somebody
said, "Well, it won't cost anything to sign them,
go ahead.' And I sit down and give my name."
And that the only purpose I had in signing was
"nothing more than I supposed if anything came
out of it I would expect my divvy out of it." I
have testified to about the same thing here, only
in different w7ords. Yes, the supposition is that I
read that paper, but there is nothing positive about
it. Most of the boys working for the concern were
there when I signed, and apparently all signed at
the same time. No, I didn't intend to lend my
name to defraud anybody. Evidently I gave Mc-
Murtry a powrer of attorney. At the time I gave
it I didn't intend to spend any money, but any sane
man [136 — 29] would be willing to spend some
money, a few dollars, if he was going to get rich out
of it. I never had any communication with Mc-
Murtry to my knowledge since the conversation
that I might have had in the office, if I signed that
power of attorney. [137—30]

Deposition of Bernard M. O'Neill, for Plaintiff.
BERNARD M. O'NEILL, called by plaintiff
April 6, 1917, testified by deposition as follows:
Reside at 419 East 45th Street, Chicago. In De-

154 The United States of America vs.

(Deposition of Bernard M. O'Neill.)
cember, 1903, was employed with the Union Stock-
yards & Transfer Company in the Exchange Build-
ing. Was acquainted with C. A. Dunbar and W.
R. Love. Have a faint recollection of Love asking
me to sign a paper of some kind as a matter of
form. That is the way it was put to me. Could
not say there was any explanation as to its purport
or effect, or that anything was said about the locat-
ing of mining or oil lands. Signed it as a matter
of friendship for Love. Don't think I knew L. B.
McMurtry. The first direct information I ever had
as to those lands located in my name is now, that
the description of the lands has been read. Q. At
the time you signed the paper for Mr. Love in
1903 wThat was your intention with respect to mak-
ing locations upon public domains of the United
States under the placer mining laws of the United
States'? A. Well, I take it, of course, this is just —
that it was probably a matter of accommodating
Love. If I would have any material interest in it
I would read it. I don't recall that. It must have
been a case of accommodation. No, I did not then
have any intention of expending any money in the
development of oil or other minerals upon the lands
which would be located by the use of my name, nor
have I ever claimed any interest in any of those

locations named

Cross-examination.
No, I don't pretend to recall all that Love said
when I signed that power of attorney, and wouldn't
say I didn't read it. Yes, I usually read papers

California Midway Oil Company et al. 155

(Deposition of John L. Bacon.)

before signing. It is likely Love explained that

paper, but I don't remember it. [138 — 31]

Deposition of John L. Bacon, for Plaintiff.

JOHN L. BACON, called by plaintiff April 5,
1917, testified by deposition as follows:

Reside at 986 West 87th Street, Chicago. Am
clerk for the Chicago, Burlington & Quincy Railway
and was in December, 1903. Have no recollection
of signing that power of attorney (Plaintiff's Ex-
hibit 8). I know Mr. Love, the notary public; at
that time he was employed with the Bowles Live-
stock Commission Company. Also knew Dunbar,
who was with the same firm. Have no recollection
of talking with Dunbar in December, 1903, about
signing any such paper or appearing before Love.
The first I was apprised that the name appeared on
such instrument wras when Mr. Favorite called on
me last summer. Afterwards I went to San Fran-
cisco as a witness. Have been employed in the Bur-
lington offices since 1896, and never knew of any
other J. L. Bacon out there or in the Exchange
Building. Mr. Love has tried to recall this matter
to me but I couldn't bring anything to my mind
that refreshed it.

Cross-examination.
My place of business in 1903 was in the Exchange
Building, Union Stockyards. I had at least a
speaking acquaintance with Mr. Love and knew he
was a notary public. As I recall it I signed his
requisition to act as notary; and never heard his

156 The United States of America vs.

(Deposition of John L. Bacon.)
official integrity questioned. Am 42 years of age.
Knew some of the men around the building and
yards there at that time, especially Hokan Roll.
Was with him a good deal during the day and eve-
ning. He came in at the time Favorite was inter-
viewing me, about August last year. His name was
also on the list Favorite showed me. Heard some of
these men discussing the matter of signing a power
of attorney but didn't take particular interest in
such conversation. Never talked with Dunbar
about this that I recollect. Yes, it is possible that
I signed the paper and forgot it, Am positive I
never lent my name to anybody for the purpose of
aiding or assisting them in their own names or for
their own benefit to acquire any land from the Gov-
ernment. [139—32]

Deposition of Frank B. Blackman, for Plaintiff.

FEANK B. BLACKMAN, called by plaintiff
April 9, 1917, testified by deposition as follows :

Eeside at 46 Semicir Street, Pittsburg, Pa., and
am a livestock man. In December, 1903, was with
the Bowles Livestock Commission Company, Ex-
change Building, Union Stockyards, Chicago, and
was then acquainted with C. A. Dunbar, W. R.
Love. Was head yardman and practically over
both of them. Have no recollection of executing
that power of attorney (Plaintiff's Exhibit 9) or of
any transaction or business of that kind. If I
signed anything of the sort it might have been put
to me in some other light, and through my con-
fidence in Love might have signed it, but have no

California Midway Oil Company et ah 157

(Deposition of Frank B. Blackman.)
recollection of having any interest in anything of
that kind. Was in the office with Love and know
of no other Blackman around me. [140 — 33]

Deposition of Hokan Roll, for Plaintiff.

HOKAN ROLL, called by plaintiff April 4, 1917,
testified by deposition as follows :

I reside in Chicago. Am in the livestock com-
mission business. Resided in Chicago in December,
1903, and was then employed by the Chicago, Bur-
lington & Quincy Railroad, in the Exchange Build-
ing, Union Stockyards. Have no recollection of
signing that power of attorney (Plaintiff's Exhibit
8). First learned that the name appeared upon
such a paper wThen Mr. Favorite called on me last
summer. Can't say wrhether I knew C. A. Dunbar
at that time and have no recollection of talking with
him about executing such an instrument. Appar-
ently L. B. McMurtry was my agent and attorney
in fact to locate oil lands, but I never claimed any
interest in any such lands or intended to acquire
any, or apply for a United States patent for the
lands described as having been located in such
name.

Cross-examination.

Am in the same building now that I was in in
December, 1903. Didn't know that Mr. Love had
an office in that building — that I remember. Yes,
I know him. If he says he saw me sign that paper
and took my acknowledgment to it I w^ould say I
say I think he was mistaken, that I don't believe I

158 The United States of America vs.

(Deposition of Hokan Roll.)

signed it. I am as positive about this as a man can
be about anything. Am forty-one years of age.
Can't say that I have talked with Love about this.
It was brought to my attention by there being so
many at the yards who were reported to have
signed it and we naturally talked about it to a cer-
tain extent, not a great deal. I didn't take any
particular interest in it for a long while because I
didn't interest myself particularly. I felt confident
in my own mind, it wras a fraud, so far as I was con-
cerned, that I had no recollection of it, having given
anyone a power of attorney to act for me, to file
lands for me. I was positive that I had not, didn't
interest me further than that I knew it [141 — 34]
was a skin so far as I was concerned, or felt con-
fident it was such; and didn't give it much atten-
tion. At that time I didn't know Mr. Love or Dun-
bar wras connected with it. Yes, I believe still it is
a fraud; I don't believe I signed it. Mr. Favorite
wras the first to call my attention to this matter. He
mentioned several names, parties who was supposed
to have gone in, and I knew some of them. Yes, I
knew C. A. Dunbar in connection with the Exchange
Building, but am not sure that I knew him in 1903.
Presume that I did. Have no recollection of his
talking to me about these matters. Yes, have talked
to him about this. [142 — 35]

California Midway Oil Company et ah 159

Deposition of Harry Hagenbuck, for Plaintiff.

HAERY HAGENBUCK, called by plaintiff
April 4, 1917, testified by deposition as follows:

I reside at 9647 South Seeley Avenue, Chicago;
have lived in Chicago about 23 years. Am in the
anti-hog cholera serum business. In December,
1903, was manager for Darlington & Company, live-
stock brokers, at 143 Exchange Building, Union
Stockyards. Have known C. A. Dunbar ever since
he was in the yards, and know W. R. Love. Can't
recollect signing that power of attorney (Plain-
tiff's Exhibit 8), and have no recollection of talk-
ing with Dunbar, Love or other persons with re-
spect to signing such a paper. I first learned that
the name appeared on such an instrument when in-
vestigator Favorite called last fall. My memory
has not been refreshed since and I can't recall sign-
ing it. Before Favorite called I didn't know that
the name Harry Hagenbuck with others appeared
as a locator on certain described mining claims in
California made January 1, 1907, and had never
heard of it.

Cross-examination.

Yes, I mean that I have no personal recollection
of signing that paper. Wouldn't say that I didn't.
[143—36]

Deposition of James Norton, for Plaintiff.

JAMES NORTON, called by plaintiff April 6,
1917, testified by deposition as follows :
Was born in Chicago in 1867 and have always

1()0 The United States of America vs.

(Deposition of James Norton.)
lived there. Am a cattle handler, with the Western
Packing Company, Union Stockyards. Was em-
ployed in the same place in December, 1903, with
Felcher, Peterson & Hess, and knew W. R. Love
and C. A. Dunbar, both employed by the Bowles
Livestock Commission Company, where I went to
get orders. Don't remember signing that document
(Plaintiff's Exhibit 9) or having a talk with anyone
about signing such a paper. Have talked about it
since I was subpoenaed, but my memory has not
been refreshed, and I have no recollection of ever
authorizing anyone to take up claims in my name.
I usually sign my name James E.

Cross-examination.
No, I didn't testify that I didn't sign that power
of attorney, I can't remember, nor do I mean to
testify that Mr. Love or Mr. Dunbar didn't ask me
to or tell me what it was. I don't remember.
[144—37]

Deposition of Joseph Norton, for Plaintiff.

JOSEPH NORTON, called by plaintiff April 6,
1917, testified by deposition as follows:

Reside at 5438 Carpenter Street, Chicago, 111.
Am engaged in hauling crippled cattle at the Union
Stockyards. Was in the same business in Decem-
ber, 1903, and knew W. R. Love and C. A. Dunbar,
who were with the Bowles Livestock Commission
Company, into which office I went occasionally.
Well, if the address is there on that paper (Plain-
tiff's Exhibit 9), it must be me. I can't remember,

California Midway Oil Company et ah 161

(Deposition of Joseph Norton.)
can't swear that I did sign it or that I didn't.
Don't remember either Mr. Love or Mr. Dunbar
talking to me about signing such an instrument.
Never talked to anyone about signing such an in-
strument. Don't know L. B. McMurtry, and never
had any communication with anyone about this
matter. Have never claimed any interest in the
lands in California described as having been located
in the name of Joseph Norton. I have six brothers
working in the yards there, of whom James is one.
[145—38]

Deposition of Thomas H. Lee, for Plaintiff.

THOMAS H. LEE, called by plaintiff April 6,
1917, testified by deposition as follows:

Reside at 811 West 55th Street, or Garfield Boule-
vard, Chicago. Was living there in December,
1903, and working for the Chicago, Burlington &
Quincy Railroad Company, in the Exchange Build-
ing at the Union Stockyards. Don't remember
signing that power of attorney (Plaintiff's Exhibit
8). Wasn't acquainted with Love, Dunbar or Mc-
Murtry. No, in December, 1903, I had no intention
of filing upon public lands, and don't remember of
ever learning that my name or the name of Thomas
H. Lee was used in making locations on oil lands in
California. I know another Thomas Lee, who was
working in the Exchange Building. He wTas a com-
mission man. [146 — 39]

162 The United States of America vs.

Deposition of William Joseph Husbands, for
Plaintiff.

WILLIAM JOSEPH HUSBANDS, called by
plaintiff April 5, 1917, testified by deposition as
f ollows :

Reside at 4800 Shields Avenue, Chicago. Am
secretary and treasurer of the Coal Teamsters
Union. In 1903 was living in Chicago. Was then
driving a coal wagon and went to the Exchange
Building in the stockyards. Don't remember going
before W. R. Love, notary public, in the office of the
Bowles Livestock Commission Company, in De-
cember, 1903, and executing a power of attorney or
any other paper. Don't knowT W. R. Love, L. A.
Chadburn, C. A. Dunbar or L. B. McMurtry, and
never knew of executing any paper before a notary
public relative to oil lands.

Cross-examination.
Was in the Union Stockyards during the summer
of 1903, but not during that winter. I never was in
the office of the Bowles Livestock Commission Com-
pany. [147—40]

Deposition of Victor G. Cranston, for Plaintiff.

VICTOR G. CRANSTON, called by plaintiff
April 6, 1917, testified by deposition as follows :

Reside at 857 West Garfield Boulevard, Chicago,
Illinois, and am manager of the Stockyards
Clearing-house. In December, 1903, I was a bill
distributer, distributed weigh tickets on orders, and

California Midway Oil Company et al. 163

(Deposition of Victor G. Cranston.)
knew W. R. Love of the Bowles Livestock Commis-
sion Company, in which office I would visit possibly
twice an hour. Also knew C. A. Dunbar at that
time. No, I have no direct recollection of signing
that power of attorney (Plaintiff's Exhibit 9).
Have talked with Love and Dunbar and tried to re-
call it, but can't. Have been wTell acquainted in the
stockyards for the last 27 years and never knew any
other Victor G. Cranston there, or T. G. or F. G.
Cranston. No, I never claimed any interest in the
lands located in the name of V. G. Cranston in Cali-
fornia as described, or had any intention concerning
them.

Cross-examination.

Wouldn't swear I didn't sign that paper, but
have forgotten it if I did. Never met McMurtry
that I know of, or Shadburn and never heard the
name McMurtry mentioned until Mr. Favorite in-
terviewed me.

Mr. HALL. — Let the record show that it is stip-
ulated that W. H. Mahoney is now dead; that the
Government's best knowledge is that Jones, Con-
verse, Nicholls [Nichals], and Johns are dead; and
that every possible effort has been made to locate
Gorman, Price (Pierce), Dalbers, Ryan, Crowley
(Rowley), Sterling and Hunt (Plaintiff's Exhibits
8 and 9). [148—41]

1(>4 The United States of America vs.

Deposition of Frank B. Chapman, for Plaintiff.

FRANK B. CHAPMAN, called April 16, 1917,
on behalf of plaintiff, testified by deposition as
follows :

I reside at No. 650 Westfield Avenue, Elizabeth,
New Jersey. Am and have been for the last five
and one-half years salesman for the Bryant Elec-
trical Company of Bridgeport, Connecticut. In
December, 1907, resided in the City of New York,
and was salesman for the Machado & Roller Com-
pany of 203 Broadwray, New York, makers of elec-
trical instruments. Met L. B. McMurtry at his
office on Broadwray in some oil building, the exact
location of which I don't remember. Met him at
the time I signed the paper. I am the one that
signed that paper (Plaintiff's Exhibit 5), but I can-
not recall all the contents; it wras through the re-
quest of Mr. Freeman, whom I had known for a
year or so previous to that time.

Do not recall that I talked to anyone else about
it. He said that Mr. McMurtry was here from
California, a big oil man, and was interested in
locating some oil lands or something of that sort,
and he had agreed to help him out as he was ac-
quainted a great deal in New York City, and my
being a friend of his, he [149 — 42] thought that
possibly I would not hesitate to do it, and I told him
I would not, if it wrould do him any good, and there
was no financial obligation, and so I signed it. Was
not then or now familiar with the public land laws
with respect to locating and acquiring title to public

California Midway Oil Company et al. 165

(Deposition of Frank B. Chapman.)
lands. Don't recall that any explanation was made
to me at that time by any person as to what rights
I had under the mining laws of the United States.

Q. What was your purpose in signing this paper ?

A. As a favor to Mr. Freeman.

Q. Did you have any other purpose?

A. Absolutely none.

Q. At that time did you intend to permit the use
of your name in the making of locations upon
public oil lands under the mining laws of the United
States, with an intention of developing the lands
and complying with the public land laws, and secur-
ing a patent from the United States to such lands?

A. No, sir.

Q. At the time you executed this power of attor-
ney, did you have any purpose of aiding anyone in
securing any title to any public oil lands in the
United States?

A. No, sir. Of course, this paper was signed,
wThat anyone could do with the paper — of course, I
signed the paper, and did it, of course, knowingly,
and I wTas in my right mind probably, but as far as
giving it any thought, as to what the consequences
would be, I forgot it.

Q. Did you intend at that time to expend any of
your own money, or means in the development of
any oil lands? A. No, sir. [150 — 43]

Q. The record of Kern County, California, dis-
closes that on January 1, 1909, acting under the
power of attorney dated December 21, 1907, L. B.
McMurtry, as attorney in fact for yourself and

166 The United States of America vs.

(Deposition of Frank B. Chapman.)
seven others, located the following placer mining
claims, under the general mining laws of the United
States, to wit:

"Minnesota," embracing the northeast quarter of
section 34;

"Massachusetts," embracing the southeast quar-
ter of section 20;

"New Jersey," embracing the southeast quarter
of section 22;

"Virginia," embracing the southeast quarter of
section 26; in Township 31, south; range 23, east, in
Kern County, California, and eighteen others.

When, if at all, did you first learn that you,
Frank B. Chapman, had been made one of the co-
locators in each of those placer mining locations
that I have designated?

A. I do not recall; I do not recall any of these
names.

Q. When, after you signed this power of attor-
ney, in December, 1907, did you again hear from
this transaction?

A. I don't know7 whether it was through a letter
from Mr. Freeman, or whether I saw Mr. Freeman
again or not ; I do not recall.

Q. Do you remember of the signing of any other
paper by you after you signed the power of attor-
ney in 1903?

A. I think I signed two proxies, papers at differ-
ent times.

(Photographic copies of two proxies are here

California Midway Oil Company et al. 167

(Deposition of Frank B. Chapman.)

offered in evidence as Plaintiff's Exhibits 1 and 2,

respectively.)

My name appearing on each of these exhibits
looks like a copy of my signature. [151 — 44]

Q. Who presented those papers to you, if anyone,
for executions? A. I cannot tell you that.

(Said Exhibit 1 reads as follows:)

Government's Exhibit No. 1.

I, the undersigned, do hereby acknowledge that
that certain power of attorney of date the 18th day
of December, 1907 and recorded in Book 10 of
Powers of Attorney at page 21, Records of Kern
County, State of California, by me together with
seven others executed to L. B. McMurtry is and at
all times since said date has been in full force and
effect and has never been revoked or modified; and
I do hereby ratify, approve and confirm those cer-
tain contracts of sale made for me and in my name
by L. B. McMurtry as my said attorney in fact with
W. F. Herrin et al, of date the 4th day of August,
1910, and all contracts, agreements, deeds and con-
veyances made by my said attorney for me and in
my name of and concerning said contract of sale and
sale, and also all other contracts and transactions
and acts made or done under said power of attorney
by the said L. B. McMurtry.

WITNESS my hand and seal this 26th day of
August, 1910.

(Sgd.) FRANK B. CHAPMAN,

L. S.

Witness : %

( Sgd. ) RUDOLPH LORECK.

168 The United States of America vs.

State of New York,
County of Greene, — ss.

On this 26th day of August, in the year one thou-
sand nine hundred and ten, before me, Rudolph

Loreck, a Notary Public, in and for said

County, residing therein, duly commissioned and
sworn, personally appeared Prank B. Chapman,
known to me to be the person whose name is sub-
scribed to the within instrument, and acknowledged
to me that — he — executed the same.

RUDOLPH LORECK.

IN WITNESS WHEREOF, I have hereunto set
my hand and affixed my Official Seal, at my office in

the County of Greene, State of New York,

the day and year in this Certificate first above
written.

[L. S.] RUDOLPH LORECK,
Notrary Public in and for the County of

Greene, State of New York.

My commission expires March 31, 1912. [152 —
45]

(Said Exhibit Two is the same in form as said
Exhibit One, but purports to have been signed by the
witness Frank B. Chapman on September 13, 1910,
and acknowledged on the same date in Luzerne
County, Pennsylvania, before W. L. Parsons, No-
tary Public.)

Don't remember receiving any money at the time
I executed either Exhibit No. One or Exhibit No.
Two. The first money I received for having signed
this power of attorney in December, 1907, was in

California Midway Oil Company et al. 169

(Deposition of Frank B. Chapman.)
1914, from Mr. Searls. I am not sure of his initials
being F. H. As I recall it I received a check from
him and he cashed it.

Q. I invite your attention, Mr. Chapman, to a
check dated September 11, 1911, payable to the order
of Frank B. Chapman, for the sum of two hundred
and fifty dollars, signed F. H. Searls ; it is endorsed
on the back as follows:

" Received from L. B. McMurtry, Two Hundred
and fifty dollars, in full payment for all my right,
title and interest in and to all lands located by said
L. B. McMurtry, on my behalf, in Kern County, Cali-
fornia, pursuant to a power of attorney made by
myself and others to said L. B. McMurtry, bearing
date the 21st day of December, 1907,

" FRANK B. CHAPMAN.
"C.W. THORN.
"F. H. SEARLS/'

Q. Is that your signature on the back of that
check? A. Yes, sir.

Q. At the time that you received that check did you
cash it yourself?

A. No, sir, I don't recall as I did.

Q.Will you please explain to us the circumstances
under which that check was paid to you and what
occurred at the time of its payment? [153 — 46]

I don't remember that check at all. I don't re-
member the two hundred and fifty dollars ; I received
five hundred dollars from him; I remember that.

Q. But that was another transaction, was it not?

A. That was in 1914.

170 The United States of America vs.

(Deposition of Frank B. Chapman.)

Q. And did you receive any money whatever in
1911?

A. I do not recall that I ever received a cent but
the five hundred dollars.

Don't remember having received two hundred and
fifty dollars or any other sum by reason of having
signed the endorsement on this check dated Septem-
ber 11, 1911. That looks like my signature on the
back of that check of that date. Don't recall having
any conference with Mr. Searls or Mr. Thorn about
the date of that check.

Mr. HALL. — We desire to read in evidence the
check, as follows, to wit :
"5th Ave. & 28th St.,
"No. 159

"New York, Sep. 11, 1911.
"SECOND NATIONAL BANK, A-63.
"Of the City of New York,
"Pay to the Order of Frank B. Chapman,
"Two Hundred and Fifty Dollars.

"$250.00/100.

"F. H. SEARLS."

Q. Did you ever receive any shares of stock in the
Pacific Oil Company?

A. I received some shares of stock, but I would
not say it was specifically the Pacific Oil Lands
Company.

Mr. HALL. — Let the record show, Mr. Stenog-
rapher, [154 — 47] that, at my request, Mr. Barnn
has promised the original stock book of the Pacific
Oil Lands Company.

California Midway Oil Company et al. 171

(Deposition of Frank B. Chapman.)

Q. I invite your attention, Mr. Chapman, to certi-
ficate No. 27 in the stock book of the Pacific Oil
Lands Company, which purports, or certificates,
rather, that Frank B. Chapman is the owner of 1000
shares of the capital stock of the Pacific Oil Lands
Company; I further invite your attention to the
transfer certificate on the back — is that your sig-
nature, Frank B. Chapman, to that certificate?

A. Yes, sir.

Q. When was it that this certificate No. 27 was de-
livered to you?

A. I do not recall; it was mailed to me. I cannot
say positively from whom it was received.

Q. How long did you retain that certificate of
stock?

A. Until Mr. Searls, I met him at the Knicker-
bocker Hotel and surrendered it when I received
five hundred dollars, together with another stock.
I don't recall what this other stock was but I think
I had seventeen hundred and fifty shares altogether.

Q. To refresh your memory, I will ask you if that
was not 750 shares of stock, if those were not shares
of stocks in the Empire Oil & Development Com-
pany?

A. I cannot say as to the name; all I can recall
is approximately — it seems to me like the Columbus
Midway.

Q. What did you pay for this certificate No. 27,
representing 1000 shares of stock in the Pacific Oil
Lands Company?

172 The United States of America vs.

(Deposition of Frank B. Chapman.)

A. My name on the power of attorney. I guess.
[155—48]

I paid no cash for it. The first I learned that I
was to receive those 1000 shares of stock was, as I
recall, it was — Mr. Freeman called me up one day,
and asked me to meet Mr. Murtry and two other
gentlemen at the Knickerbocker Hotel, and it was
during the conversation there at Mr. Murtry 's room.

Q. Was this conference at the Knickerbocker
Hotel with Mr. McMurtry and others before or after
the date of this check for $2501

A. I cannot tell you that; I don't remember that;
I cannot tell you ; the dates would have to be approxi-
mate because I don't recall.

Q. Before you surrendered this certificate in the
Pacific Oil Lands Company, had you received any
other money? A. No, sir.

I never received any dividends from the stock in
the Pacific Oil Lands Company. I don't recall ever
having received a prospectus or circular from this
company. I think I did, but I don't recall positively.

Q. I invite your attention to a check dated Janu-
ary 8th, 1914, numbered 1191, drawn on the Bank
of California, National Association, San Farncisco,
payable to the order of Frank B. Chapman, $20.00,
and signed by the Pacific Oil Lands Company, F. E.
Harrison, Secretary & Treasurer, and L. B. Mc-
Murtry, Vice-President; and it is endorsed on the
back, F. B. Chapman. Is that your endorsement?

A. It looks like it.

Q. Will you examine that check and tell me

California Midway Oil Company et ah 173

(Deposition of Frank B. Chapman.)
whether or not you ever received it ?

A. I never saw — I don't recall of receiving it; I
never got any money on it, that is certain.

Q. What do you say as to that signature, F. B.
Chapman, there ? [156 — 49] A. It looks real.

Mr. HALL. — We offer that check in evidence.

Q. When you surrendered this certificate No. 27
for 1000 shares in the Pacific Oil Lands Company,
how was that money paid to you?

A. Although I would not state positively that the
check was made out for $500, but I received five hun-
dred dollars for it and I endorsed a statement on the
back.

Q. Of the check?

A. Yes. I don't recall whether it was for $500 or
$5,000, but I got a five hundred dollar bill, I got
one five hundred dollar bill.

Q. And who handed that to you ? A. Mr. Searls.

Mr. HALL. — Have you any check representing
that transaction?

Mr. BRANN. — No ,1 have no checks in that trans-
action at all in my possession, no part of it.

Mr. ACH. — Mr. Brann, while Mr. Hall has asked
you that question, I will ask, have you any check of
any kind other than these you have produced, checks
of any kind ?

Mr. BRANN. — To which I answer, no.

Mr. ACH. — Endorsed by Mr. Chapman in any
way?

Mr. BRANN. — To which I answer, no. I was

174 The United States of America vs.

(Deposition of Frank B. Chapman.)

trying to make omnibus answer covering all this

matter.

Q. I invite your attention to an instrument which
was executed at the State of New York, or in the
State of New York, rather, in the County of Sul-
livan, on the 19th of August, 1913, before George H.
Raum, a notary public. Is that your signature to
that instrument? A. Yes, sir.

Q. Do you remember the circumstances under
which that was executed?

A. Yes, I was on my vacation.

Mr. ACH. — Won't you identify the paper a little
closer ?

The WITNESS.— (Continuing.) I cannot do
that, but I can identify [157 — 50] the signature.
I don't recall — I did not read hardly any of these
papers, as I recall. If any of these felllows asked
me to sign anything, I signed it thoughtlessly, I
believe, in a great many instances.

I think Mr. Thorn brought that paper for me to
sign.

Q. Did you receive any money at the time you
signed that paper? A. I don't remember of re-
ceiving a nickel. Q. Why did you execute that?
A. Just because he asked me to, the same reason I
signed the first paper.

Mr. HALL. — I offer this paper, and ask that it
be marked and incorporated into the minutes at this
time.

(Paper marked as Government's Exhibit 5 is as
follows) :

California Midway Oil Company et ah 175

Government's Exhibit No. 5.

KNOW ALL MEN BY THESE PRESENTS,
that I, the undersigned, have made, constituted and
appointed and do by these presents make, con-
stitute and appoint L. B. McMurtry, of the City of
San Francisco, State of California, my true and
lawful agent and attorney, to represent me at the
annual meeting of the stockholders of PACIFIC
OIL LANDS COMPANY, to be held in the City of
San Francisco, State of California, on the 18th day
of August, 1913, at ten o'clock in the forenoon, and
at any other meeting or meetings of the stock-
holders of said corporation which may be held after
the date hereof and up to and including the 31st day
of December, 1913.

And I do hereby AUTHORIZE and EMPOWER
said L. B. McMURTRY to vote as my proxy, for
me and in my name, at any and all such meetings
upon the stock now standing or which may then
stand in my name on the books of said corporation
and to do any other acts and things which I might
do if personally present.

And I further hereby give and grant to my said
attorney full power of substitution and revocation
and hereby ratify and confirm any and all acts and
things [158 — 51] which my said attorney or his
substitute or substitutes may lawfully to by virtue
thereof.

Witness my signature and seal, dated this 19th
day of August, nineteen hundred thirteen, at the
City of New York, State of New York.

176 The United States of America vs.

Signed, scaled and delivered in the presence of:
(Sgd.) PRANK B. CHAPMAN. (Seal)
[Seal] (Sgd.) C. W. THORN.

State of New York,
County of Sullivan, — ss.

On this 19th day of August, in the year 1913,
before me, George H. Raum, a Notary Public in
and for the County of Sullivan, State of New York,
personally appeared Frank B. Chapman, known to
me to be the person whose name is subscribed to the
foregoing instrument and acknowledged that he ex-
ecuted the same.

(Sgd.) GEORGE H. RAUM,
Notary Public, Sullivan County.

My commission expires on the 31st day of De-
cember, 1913.

My attention being called to a paper dated De-
cember 13, 1913, purporting to be a consent to the
distribution of a dividend by the Pacific Oil Lands
Company, I recall the signature, that it looks real.

Mr. HALL. — We offer this paper in evidence and
ask that it be marked Government's Exhibit 6.

I don't remember who sent me that paper, or how
I came to sign it.

(This paper is marked Government's Exhibit 6
and is as follows) :

Government's Exhibit No. 6.
PACIFIC OIL LANDS COMPANY:

I, the undersigned, stockholder of the Pacific Oil
Lands Company, a California corporation with its
principal place of business in the City and County

California Midway Oil Company et al. 177

(Deposition of Frank B. Chapman.)
of San Francisco, State of California, do hereby
consent [159 — 52] that the Board of Directors
of said corporation may set aside $20,000.00 of the
cash assets of said corporation to be declared as a
dividend upon the stock of said corporation, and
such other sums from time to time as in their dis-
cretion may seem advisable; and I hereby release
the Board of Directors of said corporation from all
liability of every kind and character in so doing.
Dated: December 13th, 1913.

(Sgd.) FRANK B. CHAPMAN.

Q. Referring, now, Mr. Chapman, to Govern-
ment's Exhibit 1 and Government's Exhibit 2, you
will observe that both documents attempt to " ratify,
approve and confirm those seven contracts of sale
made for me and in my name by L. B. McMurtry,
as my said attorney in fact with W. F. Herrin
et al., of date the 4th day of August, 1910, and all
contracts, agreements, deeds and conveyances, made
by my said attorney for me and in my name, of and
concerning said contract of sale, and sale, and also
all other contracts and transations and acts made
or done under said power of attorney by the said
L. B. McMurtry." At the time you executed Ex-
hibits 1 and 2, did you know the contents of these
contracts with Herrin and others, bearing date Au-
gust 4, 1910?

A. I don't recall that. Qi. At that time, to wit,
September 13, 1910, did you know how many loca-
tions of public oil lands had been made in the State
of California by the use of your name?

178 The United States of America vs.

(Deposition of Frank B. Chapman.)

A. Not that I remember. Q. Did you make in-
quiry of any person at that time as to how many
locations your name had been used in making? A.
No, sir. Q. Were you ever advised by anyone that
on August 6th, 1910, Mr. L. B. McMurtry signed as
attorney in fact for yourself and others, and entered
into a supplemental agreement with W. F. Herrin
and others, or with the Associated Oil Company,
with respect to lands involved in these locations
which [160 — 53] were made by the use of your
name? A. I don't remember that I did. Q. Were
you ever advised as to what sum or sums of money
Mr. McMurtry received from W. F. Herrin and
others, or from the Associated Oil Company, as a
result of the execution of those contracts of August
4, 1910, and the supplemental agreement of August
6th, 1910?

A. No, sir. Q. What advice if any, have you re-
ceived from any sources as to what moneys
Mr. McMurtry or anyone else has received from the
sale, lease, or any other disposition of any of the
lands covered by locations on which your name was
used as one of the locators?

A. I do not recall receiving any. Q. January 1,
1909, have you claimed in any of the lands covered
by the locations to which I referred some time ago,
namely, "Minnesota," " Massachusetts," "New Jer-
sey," "Virginia," and eighteen others unnamed at
present ?

A. Knowingly I claimed none.

California Midway Oil Company et ah 179

(Deposition of Frank B. Chapman.)

I do not know where any of these locations are or
anything about them.

Q. Was there ever any portion, other than the
five hundred dollars which was paid to you at the
time you surrendered your certificate of stock in
the Pacific Oil Lands Company, of the approx-
imately $1,058,000, received by McMurtry from the
Associated Oil Company, paid to you?

A. I never received anything but the five hundred
dollars that I recall. [161—54]

Cross-examination by Mr. ACH.

Q. What do you mean, "I don't remember," "I
don't recall"? A. That is what I mean, I don't;
I paid so little attention to this whole affair that it
absolutely passed from my mind. A great many
things I have seen here, why, I must have been
hypnotized.

A. Yes, I went to San Francisco as a witness in
cases A-41, A-42 and A-43 in November, 1916.
Went at the request of the Government's attorney.
Don't recall having been interviewed by Mr. Will-
iams or Mr. Williamson prior to going to San Fran-
cisco. Was interviewed by Mr. Hamel prior to
going to San Francisco and signed the statement at
that time. I think I told him the amount of money
I had received was $500.00, and that I recalled sign-
ing two papers, two proxies. At the time of this
interview with Mr. Hamel, these two proxies were
the only papers I recalled having signed. When in
San Francisco on these other cases think I was
asked about these checks or money I had received,

180 The United States of America vs.

(Deposition of Frank B. Chapman.)
and testified that I had received five hundred dol-
lars. My recollection is that I then testified to re-
ceiving only one check, that for five hundred dol-
lars. I don't recall positively having been asked
at that time concerning the number of checks — my
receipt of a check for $250.00 and one for $20.00.
Have met Mr. McMurtry twice. First when I
signed the power of attorney and the second time,
I believe, was in the Knickerbocker Hotel. I don't
recall ever having met J. B. Thickens. Don't
know Major or Mr. Hoeppner. Have only heard of
him. Signed this power of attorney at the request
of Mr. Freeman. Had known him about a year
before that. He was connected with an exhibition
of mining instruments and tools, etc. I was an
electrical engineer. He was employed by the min-
ing exhibiting company and I met him at that time.
Between the time I first met Mr. Freeman and the
time I signed this power of attorney [162 — 55]
I met him " possibly three or four times, just hap-
pened to met him on the street."

Q. You just casually met him? A. He came to
the office, I think, once or twice, to see me. Q. On
business, on account — A. No, in connection with
nothing, only his own private affairs. Q. In what
matter, in what particular? A. He wanted to bor-
row a dollar. Q. And other than borrowing some
money from you, he had no relations with you at
all, excepting a casual acquaintance which sprung
up at the time of the mining exhibit; is that cor-
rect? A. Yes, sir. Q. And then upon one or two

California Midway Oil Company et al. 181

(Deposition of Frank B. Chapman.)
occasions he came to see you, as I understand it,
between those dates'? A. Yes, sir. Q. And at-
tempted to borrow some money from you ? A. Yes,
he was successful. Q. Did he repay you? A. I
don't recall ever receiving any money from him.
Q. What? A. No, sir.

It may have been a year or six months. I loaned
him a dollar once or twice just as I would anyone,
but did not consider him my debtor at the time I
signed this power of attorney in Mr. McMurtry's
office, although he had not repaid the money loaned
him.

Q. Prior to your signing this powTer of attorney
with him in Mr. McMurtry's office, the only relation
you had with Mr. Freeman was that you had met
him at this show casually, or upon the street once
or twice, and then upon one or two occasions when
he came to your office and asked you to lend him a
dollar, and that is all ? A. That is all there is to it.

At the time I met Freeman I was an electrical
engineer with Rockwell & Bruce, No. 26 Cortlandt
Street. Mr. Freeman was then employed by the min-
ing show7 people soliciting space for the show and
he would come in, when he came in, he would pos-
sibly pass the time of day, but I don't remember
any particular visit. I never visited his house, and
he never visited ine. I was a [163 — 56] salaried
man at that time. I think I got twenty-five dollars
a week and had no other means. I had no family
at that time, and no obligations outside of my per-
sonal affairs. I never borrowed any money from

182 The United States of America vs.

(Deposition of Frank B. Chapman.)
Mr. Freeman. At the time I signed this power of
attorney my only resources was my salary of twenty-
five dollars a week. Freeman first mentioned my
signing this power of attorney the day I signed it.
He called me on the phone and I went up to Mc-
Murtry's office on Broadway. I had never been in
McMurtry's office before, and had never heard of
him before. The first time recall Freeman ever
saying anything to me about oil lands was there
in McMurtry's office that day I signed the power of
attorney. Up to that time the only business trans-
action of any kind or character I ever had with
Freeman or McMurtry was the occasional loans I
made to Freeman. I believe there were other peo-
ple in McMurtry's office at the time I went there to
sign this power of attorney and Freeman introduced
me. I didn't notice particularly how many were
there, and did not see any of the others sign their
names, that I recall. I don't remember any of these
people.

Q. Were you introduced to McMurtry at that
time? A. I think when I left the building I was.
Q. In that same room? A. No, I think it was in
the hall, in front of the elevator. Q. Did anybody
give you anything for signing that paper at that
time? A. No, sir. Q. Did anybody promise you
anything for signing? A. It was a sort of semi-
promise ; Mr. Freeman thought there might be a lot
of money in it for me some day. Q. Why didn't
you mention that on direct examination to-day when
Mr. Hall asked you to tell what was said? A. He

California Midway Oil Company et ah 183

(Deposition of Frank B. Chapman.)
asked me why I signed it, and I told him because
Mr. Freeman asked me to, but he didn't ask me
what Freeman said, I don't think. Q'. Didn't he
ask you whether you intended to put up any money,
or get anything? [164 — 57] A. I think he asked
me if I intended to, yes. Q. Why didn't you an-
swer, w7hy didn't you in answer to his question, then,
when he asked you to tell the circumstances, what
was said, why didn't you tell then that this man
told you on that same day, that you might make a
lot of money out of this thing? A. Why, I don't
knowT; I don't think he asked for the conversation.

I remember Freeman's saying that we might get
some money, a lot of money, or something like that,
I presume he told me at that time something about
Mr. McMurtry's capacity in the oil business, but
I don't remember anything about the conversation.

Q. Well, wThy do you then think that you pre-
sume he did ?

Q. Well, why do you then think that you pre-
sume he did?

A. Well, usually, if a fellow has anything, and he
has an object, I presume he would enter into a sort
of conversation by expressing any suggestions which
might convince the one wThom he wanted to do
something for, that he thought it was all right. I
presume — I don't recall just what he said to me,
but I presume he told me all about it at the time;
but I didn't pay any particular attention to that;
but, as I have said before, I signed because Mr.
Freeman asked me to sign it. Q. Is it true, as a

184 The United States of America vs.

(Deposition of Frank B. Chapman.)
matter of fact, that Mr. Freeman did tell you that
it was in connection with oil that he wanted your
signature and the location of oil lands in Cali-
fornia? A. It was in connection with oil lands,
certainly. Q. And before you went up there and
talked to him at all, did you know that Mr. Free-
man had been engaged in any way in the oil busi-
ness? A. I don't think I did; no, sir. Q. Then
it was an entirely new subject matter when he
opened it up there in Mr. McMurtry's office with
you? A. So far as we were concerned, yes, sir.
Q. And when he telephoned you to come up there,
you did not have any idea of what he wanted, had
you? [165 — 58] A. No, I don't remember whether
he told me wThat he wanted me to do or not. He
wanted me to come up there and see him, and he
said he wras located up there and he wanted me to
come up there, there at the office. Q. Was there
any talk at all about oil? A. Where, over the
phone? Q. Yes. A. Why, he mentioned, I think,
that he was with Mr. McMurtry; I don't remember
whether he said anything about oil or not, until I
got up there. Q. Has he been, so far as you know,
engaged in any way in selling any stocks in oil
companies ? A. Not so far as I know. Q. And you
had no reason then to, as the boy in the street would
say, "Stall off," going up to see him about any-
thing? A. No, I had nothing against the man. Q.
And when he asked you to come up there and see the
office, you thought it was simply to come up there,
when you did go up there, and take a look around

California Midway Oil Company et ah 18o

(Deposition of Frank B. Chapman.)
the office that he was in? A. I had no especial
interest in going up. Q. And there was never any
talk about any oil stocks between you and Mr. Free-
man, personally? A. No, sir. Q. You are reported
as having said in answer to a question at page 82
of your former examination, in response to a ques-
tion by Mr. Hall: "Q. Will you explain to the Court
under what circumstances you executed that power
of attorney? A. I knew a Mr. Freeman — I don't
recall his initials— I think F. S. Q. F. H.? A. Or
F. H., and I was in the office one day and he called
me on the phone and I believe he said that he was
connected with some oil company. I won't be sure.
Btit he said, * Come up and see me. ' As I recall it,
I said, 'I have not any more money for oil.' He
said, 'Come up. I don't want you to buy any
stock.' " Do you remember testifying to that in an-
swer to Mr. Hall's question? A. Yes. I think I
did. Q. And you did not remember it when I was in-
terrogating you a few minutes ago? A. No, sir, not
word for word, just casually. Q. Your mind is
rather hazy and uncertain [166- — 59] about the
whole thing, is it not? A. Some things, yes.

Yes, I was a little bit surprised to see my sig-
nature on the $250 check dated September, 1911,
this morning. Yes, I think I would have testified
positively that I had not put my name to such a
check, if it had not been shown me. Yes, I was
equally surprised when I saw the dividend twenty
dollar check with my signature to it.

Q. And you wrould have testified positively and

186 The United States of America vs.

(Deposition of Frank B. Chapman.)
without any reservation at all that you never put
your name on the twenty-dollar check, which repre-
sented dividends in that matter, would you not?
A. I would testify that I never received money on
the check. Q. And would you not also have testi-
fied that you had never put your name on the twenty
dollar check for dividends? A. Yes, sir; I believe I
would.

I have not the letters which it has been mentioned
that I received from Searls, Freeman, or some-
body. I don't remember what I did with them — I
threw them away. I might have written Mr. Searls,
but I don't remember writing to Mr. Freeman. I
kept no copies of any such letters — I don't remem-
ber of ever writing one. I don't recall sending
these proxies and power of attorney and consent to
a dividend to San Francisco. I believe I sent one
to Thorn and the other, he came in person. I re-
ceived this stock certificate No. 27. Am quite pos-
itive, through the mails. Cannot recall whether I
returned the receipt through mail. Cannot say
definitely when I received this stock certificate.
Believe I signed my name on this stock certificate in
the Knickerbocker Hotel in the presence of Mr.
Searls, in 1914. Think I received this stock "two,
three or four years" after signing the power of at-
torney.

Q. And where did you keep it meantime? A. I
gave it to the present Mrs. Chapman. Q. When,
please? A. At the time I got it, [167 — 60] when
I received it. Q. She was not your wife at that

California Midway Oil Company et al. 187

(Deposition of Frank B. Chapman.)
time? A. No, sir. My present salary is $300.00 a
month. In 1914, at the time I put my signature on
the back of the stock certificate my salary was
$200.00 a month.

Q. Up to the time you put your signature upon
the back of this piece of paper, you never had a
dollar out of this thing? A. At that time I put
my signature? Q. On certificate No. 27? A. Not
that I recall, no, sir. Q. Let us not misunderstand.
I understood you to say on your direct examina-
tion, and I understand you now to say, that it was
not until after you signed the transfer of this stock
at the Knickerbocker Hotel that you received any
money at all in this transaction? A, Until I had
handed that over, no, sir. Q. In other words, you
disposed of this stock and got rid of it, and that
was the first time you ever got a dollar from any-
body on this transaction? A. Yes, sir. Q. And
that is absolutely so, as you recall it? A. Yes, sir.
Q. Have you any explanation to make as to why
you put your name on the back of that check of
September 11, 1911, for two hundred and fifty dol-
lars. A. No, sir. Q. Have you any explanation to
make as to what you did with the check for $20.00
after you put your name on it? A. No, sir. Q.
Not the slightest recollection about it? A. I don't
remember anything about either one of those checks.

Aside from talking about locating oil lands, I
don't recall any of the conversation at McMurtry's
office at the time I signed that power of attorney.
Was there possibly ten minutes. Don't know why

188 The United States of America vs.

(Deposition of Frank B. Chapman.)
Freeman picked on me to sign this power of at-
torney. Think he said that I came to his mind as
one of those that he would like to let in on it, or
something of that kind. [168 — 61] Don't believe
he said anything about doing this as a kindness
in return for the loans I had made him. He said
I might get something out of it, but didn't say how,
that I recall. He seemed very sincere and I think
he thought he was giving me a good thing. He
seemed to have a whole lot of confidence in the
proposition that he was promoting. I don't re-
member asking him what he meant by the location
of lands, or what location meant. Know I did not
knowT. Presume I made inquiries of him, but would
not swear that I did. Don't recall that I asked him
what a location meant.

Q. I have before me your answer at page 82 to
the same question that I read you a little while ago,
in which Mr. Hall asked you to explain the circum-
stances under which you executed the power of at-
torney, and I will now read further in that answer,
immediately following the excerpt that I read be-
fore to you, and wTe have you reported as follows :

"So I went up and met Mr. Freeman and
looked around the office, and while I was there
I told him that I was in a hurry; and he asked
me to sign this paper, which I assume is a
powrer of attorney. I asked him what it was;
that I did not have time to read it particularly ;
and he said, 'Well, there is a Mr. McMurtry
from the west. He is a big oil man. I know

California Midway Oil Company et al. 189

(Deposition of Frank B. Chapman.)

some people around New York, and he is a
practical stranger, and I have agreed to get
a certain number of names for him as locators.'
I said, 'What does locators mean?' and he
painted it in a rather flowery wTay, and he says,
'You might get a lot of money out of it some
time.' I said, 'All right; if I can sign this
paper and it is not going to get me into serious
difficulty and don't cost me anything, I will sign
it.' And did sign it." [169—62]
Do you remember testifying to that ? A. Yes, sir.
Q. And by reading this, does it recall to your memory
that you did ask him what locators meant? A. I
don't think in my testimony here I said — Q. Well,
go on. A. I said I did not recall it. Q. Now, please
answer my question : Does my reading this transcript
of your testimony, or excerpt from the transcript of
your testimony now refresh your memory to the ex-
tent that you can say positively that you did ask
him, as you testified before, "What does locators
mean?" A. Yes, sir, I would say my testimony is
right. Q. I am not asking you about that. I am
asking you, do you now remember that you asked
him the question, "What does locators mean?"
A. Practically the same thing, yes, sir. Q. Did you
remember that you did ask him that question at the
time you testified in San Francisco, in November,
1916? A. Yes.

I do not recall what answer he made to this
question.

Q. Outside of painting the thing to you in a very

190 The United States of America vs.

(Deposition of Frank B. Chapman.)
flowery manner, and telling you that you might make
a lot of money out of it, what did he tell you, or
anybody tell you what was meant by locating lands
in California under that powrer of attorney? A.
Why, as I recall it, he said something about a lo-
cator, in order to get a patent or something, he had
to have so many locators' names, and that if he
could get the locators' names he could go on and
locate lands and work out the assessments, or some-
thing of that kind, or words to that effect — I don't
know.

Think I met McMurtry as I was going out after
having signed the power of attorney.

Q. And didn't he also tell you in substance, sub-
stantially to this effect, in a general way, that Mr.
McMurtry was a man who knew California, knew
w7here oil lands were; that he was going out there
again and he was going to devote himself to a
search for oil [170 — 63] lands belonging to the
Government, and that having the right of each citi-
zen to locate lands, that he wanted to be equipped so
that he could locate lands in California, if he found
them, and that the locators secured here in New
York would be advised sooner or later whether he
located any lands in their names or not — any con-
versation to that effect? A. Why, not that I recall,
words to that effect, possibly. This is ten or eleven
years ago.

I cannot say what the conversation was, but it wTas
in that — anyway it wTas in that connection — I don't
know. No, I wTas not trying at that time to aid or

California Midway Oil Company et ah 191

(Deposition of Frank B. Chapman.)
assist McMurtry or Freeman to commit a fraud
upon the Government and get more land than an in-
dividual was entitled to under the laws.

Q. You do recall that he said to you that you and
all other individuals in the United States, had a
right to locate public lands, do assessment work
upon the lands, and after discovery of oil, get a pat-
ent from the Government; you remember that? A.
Yes. Q. Now, you did not understand, did you,
that you were going to make money out of this
thing, as he painted it, simply by signing your
name, did you? A. No, sir. Q. And you expected
that in the event that anything came out of this man
acting as your agent, and using your name, you ex-
pected to be advised of it, didn't you? A. I don't
think I gave it any thought.

No, I had no arrangement or contract with Free-
man or McMurtry that I would be advised of it that
I recall. No, I had no arrangement with Freeman
whereby he would go down in his pocket and pay
for the assessment work that was required under
the law in the event that he located any lands for
me in California. No, I had no such arrangement
with anyone. No, there was no understanding or
agreement of any kind or character between myself
and McMurtry when I left that place. Yes, the en-
tire conversation [171 — 64] that occurred there
was between Freeman and myself and those other
gentlemen, until I met Mr. McMurtry in a casual
way, that is all.

Q. Well, can you tell what passed between your-

1D2 The United States of America vs.

(Deposition of Frank B. Chapman.)

self and McMurtry after you signed the power?

A. Mighty few words.

Mr. Freeman introduced me as an electrical en-
gineer and he said, as I recall it, Mr. McMurtry,
Mr. Chapman is a good man for us, because he is an
electrical engineer, and we might have occasion to
use him in California some time. Mr. McMurtry
shook hands and said "That is good," or something
like that, and took the elevator.

Q. I suppose there was more or less desultory talk
about a great amount of oil being found out there in
California, great gushers, and selling land at two
dollars and a half ? A. I always heard more or less
about oil lands and gold mines. Q. And you re-
garded this step as the initial step in the ladder of
getting rich in life, didn't you? A. No, sir, not at
all. Q. You did not think that he was lying to you
entirely, did you, when he painted it in a flowery
way, as the great big money you would get out of it
some time, did you? A. I never expected to get a
dollar out of it. Q. No matter about that. A. He
might have. Q. But you, yourself, thought it might
be among the range of possibilities that you might
by reason of some lands he might locate in your
name? A. No, sir. Q. And you thought you were
doing an absolutely idle and vain act, at that time?
A. I did as far as any moneys or profits coming to
me. Q. It was then simply a lack of confidence on
your part in the picture which he painted ? A. Yes,
sir. Q. You don't mean to be understood as saying
that if he located lands in your name, reported it to

California Midway Oil Company et ah 193

(Deposition of Frank B. Chapman.)
you [172 — 65] and told you that he had done as-
sessment work out there, and borrowed money upon
the lands to drill wells, well, say to the extent of ten
thousand dollars, and that he had gotten an oil well
upon 160 acres of that land, and that he had had an
offer of one million and a half dollars for that land,
but in order to get the million and a half you would
have to apply for a patent and pay the Government
two dollars and a half an acre that you would not
have put up your money, do you ? A. I would have
investigated before I wTould have expended any
large sums of money. Q. And if you had found out
it was true, would you have put up your share
and gotten the land? A. If it was possible, and
thoroughly legal, legally possible, possibly I would,
yes, sir. Q. You would not have said to Mr. Free-
man, well, you are entitled to my share of this mil-
lion and a half, would you? A. I might have done
so upon investigation that it was not what I thought
it ought to be. Q. In other words, you would have
felt no obligation or under those circumstances Mr.
Freeman could have your share of the million and a
half. A. You would understand that I would have
a thought that I had no money invested in this
proposition.

I presume I read this power of attorney before
signing it and understood that I was giving him the
right to locate in my name under the laws of the
United States, either mineral or oil lands.

Q. Now, this power of attorney goes on and fur-
ther gives him authority to grant, bargain, to sell,

194 The United States of America vs.

(Deposition of Frank B. Chapman.)
assign, lease, pledge, mortgage, deed, any part or all
of such mining claim or claims, and to execute and
deliver any contract or contracts of sale, deed or
deeds conveying any part of your interest in and to
any such mining claim or claims as might be ac-
quired here in any part of the United States of
America, and giving him full power of authority,
[173 — 66] and with full power of substitution.
Now, when you read that, if you did read it at that
time, you also recognized the fact that you were
giving him the right to sell, assign and mortgage
these properties which he might locate for you and
in your name; do you remember that fact? A.
Well, I don't remember what really the paper was;
I cannot recall that.

Having heard it read it does not come back to my
mind ; not a thing, absolutely. I certainly don 't re-
call what it was. Yes, I was in business for my-
self before signing this power of attorney; was in-
terested in an officer in an electrical business doing
a considerable business throughout the country.
Yes, the firm occasionally signed checks, promissory
notes, and contracts and specifications and things of
that kind. Yes, I would frequently, as officer of
this company, sign the firm's name to checks, notes,
contracts, specifications and such things. Yes, I
would always read them over and always knew what
I was signing. Yes, I understood there was some
responsibility to a man's signature to every docu-
ment that he signed, and knew this when I signed
the power of attorney. Knew that I would be

California Midway Oil Company et al. 19o

(Deposition of Frank B. Chapman.)
bound by my signature. I think the first that I
knew of anything having been done under this
power of attorney was when I received the stock.
Received this through the mail. Yes, I am quite
positive I received it through the mail, but I would
not state positively, but I think that is right.

Q. Are you not positive that the next thing you
heard about the matter, after signing the power of
attorney, was when you received the stock*? A. I
may have gotten a letter from Mr. Thorn, or Mr.
Freeman, but I think I got a letter from Freeman,
I believe it was before I received the stock.

I was then at Cumberland, Maryland. Don't
know where the [174 — 67] letter is. Don't re-
member what it said or anything about the language
in it. I should say this was two or three years
after the signing of the power of attorney. I don't
think it was as much as four years, it was before I
got the stock. Am quite sure it was not within a
year and a half after signing the power of attor-
ney. As wrell as I recall, that was the first I had
heard of this matter after signing the power of at-
torney. No, I have not been ill since signing this
power of attorney and have not noticed that my
memory has been affected in ordinary affairs. The
only way I can account for failure to remember my
signature on these two checks is that "I don't re-
member it and that is all." Yes, I am quite posi-
tive that the first time I heard anything about this
transaction after signing the power of attorney was

196 The United States of America vs.

( Deposition of Frank B. Chapman.)
when I got a letter from Mr. Freeman, in Cumber-
land, Maryland.

Q. Now, just look at the dates of this ratification
or these ratifications in front of you, and tell us
about them? A. This is in 1910. Q. Yes, I know
that ; but I say, how did you hear about this ? A. I
don't remember. Q. Did you receive the letter
from Freeman before you signed these ratifications'?
A. I believe so; yes, sir. Q. Then when you got
the ratification, you had already had some kind of
report from Freeman as to the transaction in Cali-
fornia? A. I don't remember as to that.

This letter had no reference to those ratifications.
Yes, at the time I signed those ratifications I had
received this communication from Freeman con-
cerning the California enterprise.

Q. Well, now, after you got that communication
and before you signed those papers, was there any
hope or promise or suggestion made that this thing
you did not regard as anything at all when you
signed your name, might develop into something?
A. Yes, I think that was in Mr. Freeman's letter.
Q. Well, what was in the [175—68] letter? A.
He referred to the paper I signed and said — I don't
recall just what he said — he referred to the paper
I signed, that it looked pretty good; they had— I
don't recall wThat it said, but it might be a good
thing, and I signed it, or something of that kind;
things looked good out there, or something to that
effect.

He may have mentioned McMurtry, but I

California Midway Oil Company et ah 197

(Deposition of Frank B. Chapman.)
don't recall. Nor do I recall his mentioning
that McMurtry was locating oil lands with the
powers of attorney. No, I did not write him
for further details; paid no attention to it. I
was travelling at that time for the National Carbon
Company and think I was getting eighteen hundred
dollars a year. No, I hadn't made any money in
stock speculation or otherwise than just my salary
between 1907 and that date. All I had was what I
had saved out of my salary. No, I was not in debt.
I can't say how much I had at that time. Yes, I
presume I had as much as $2,500. Don't think I
had more than that.

Q. Nowr, this letter, then, of Freeman's, did you
regard that at that time as an encouraging letter to
you, to spur you on, for you to go on, or did you re-
gard it as an expression of a view, based upon in-
formation which he had from McMurtry, directly or
indirectly, concerning these oil land locations in
California; do you understand the question? A.
Yes, sir. As I said before, I had absolutely no con-
fidence in it, but I do not think I gave the thing any
thought. Q. But when you got this letter — just
kindly heed the question, and the reporter will
again read it to you. Q. (Question read.) A.
Why, I presume it was a letter to spur me on, if
that is the way you want to put it ; but it didn't spur
me, if that is what you want to know. Q. You
didn't need any spur? A. No, sir, not in that di-
rection. Q. What did he know about your circum-
stances at that time that would cause him to write

198 The United States of America vs.

(Deposition of Frank B. Chapman.)
a letter to you, simply to spur you on in your enter-
prise? [176 — 69] A. I don't know whether he
felt under obligations to me in any way or not, I
don't know. Q. You don't think he was lying to
you wilfully or deliberately? A. Probably he
thought I wrould be interested in it as he was. Q.
You are reported in the other case as having said
in answer to questions from Mr. Hall, at page 84 :

"Q. After you signed it, when did you next
hear from it or anything about it?

"A. I won't be sure about that. It seems to
me, though, as near as I can recall — well, I
won't say that, because I think, — well it was
about two years, I should say, afterwards, as I
recall it.

"Q. What wTas that communication, or what
did you hear in regard to it ?

"A. I got a letter from Mr. Freeman. I was
then in Cumberland, Maryland, on the road,
and I think he said at that time that he had
seen Mr. McMurtry, and he says, 'You re-
call the paper you signed. It looks just as
though wre are all going to be rich some day.'
That was all there was to it, I did not reply to
the letter."
Do you remember that now? A. I think I re-
member the testimony, yes, sir. Q. Do you remem-
ber that? A. Yes, sir. Q. Was that true, is that
what he said in the letter ? A. I believe it was, sub-
stantially, that. Q. You didn't remember that
when I interrogated you to-day, that you had used

California Midway Oil Company et al. 199

(Deposition of Frank B. Chapman.)
the phrase that he said it looks as though we are
all going to be rich some day. You didn't think it
went that strong, did you? A. I believe he painted
it flowery, as I said before. Q. I am not talking
about his painting it flowery, but about this letter
and your recollection, [177 — 70] and memory.
You didn't remember that when I interrogated you,
when I asked you to tell me — A. Well, words to that
effect. Q. You didn't remember that? A. Not ex-
actly; no, sir. Q. Now7, that I have read the record
to you, do you remember that substantially, that lan-
guage was in the letter? A. I would say words to
that effect, yes, sir.

Q. If you will permit me, Mr. Chapman, I will
call your attention to Government's Exhibit No. 1,
and I am going to read it to you, as Mr. Hall did,
and at the time he was reading it you read it, didn't
you? Follow this. A. Yes, sir. Q. Do you know
what is understood, wrhat the paper is without read-
ing it again? A. I cannot say word for wrord.
Q. Does it mention these powers of attorney? A.
Yes, sir, I think so. Q. In what manner does it men-
tion it, what does it say? A. I cannot say as to
that. Q. Does it mention any contract concerning
located lands ? A. I think it does. Q. Does it give
the date of any contract? A. I cannot be sure of
that. Q. Does it give the name of anybody with
whom it is understood any contract wras made ? A. I
don't remember that. Q. In what manner does it
refer to any contract, have you any recollection at
all? A. No, I was looking mostly at my signature

200 The United States of America vs.

(Deposition of Frank B. Chapman.)
when M r. Hall showed it to me. Q. But you did read
that, and you heard him read it? A. Yes, sir. Q.
Won't you please tell me, if you can, what reference
it makes to the contract referred to in the instrument
itself? A. I cannot tell you. Q. What is the gen-
eral purpose of the instrument, do you know? A.
No, I would not say definitely. Q. All right. Now,
at the time that you signed it, you were in Greene
County — you know Greene County, don't you? A.
I know where it is, yes. Q. What towns in Greene
County were you making in the year 1910, in August
or September? A. I was on my vacation. Q. Oh!
Then [178 — 71] you remember that you were in
Greene County on your vacation in 1910? A. Yes,
sir, I was. Q. Where were you? A. Platts Cove.
Q. And while you were there you found a notary, did
you, by the name of Rudolph Loreck, or something
of that kind? A. I don't recall his name. Q. But
you recall going to a notary public with the original
piece of paper ? A. Yes, sir. Q. Was anybody with
you? A. No, sir. Q. How did you receive the
original wThile you were at Platts Cove, or did you
carry it there with you? A. I received it by mail.
A. From whom? A. I think Mr. Thorn. Q. C. W.
Thorn? A. Yes, sir, I think so. Q. Then you must
have received a letter with it? A. I presume so.
Q. Do you remember it? A. Yes, sir. Q. Where
is that letter? A. I don't know. Q. Do you think
you have got it ? A. I know I have not got it. Q.
Then you know it is destroyed? A. Yes, sir. Q.
What was in the letter? A. I cannot state posi-

California Midway Oil Company et at 201

(Deposition of Frank B. Chapman.)
tively, but something about a proxy he would have
me get back to him as they had to get it to California
by a certain time. Q. Was anything said in the
letter about enclosing you any paper that you should
sign before a notary public, and acknowledge, and
send it back to anybody? A. I believe so; I believe
I sent it back to him. Q. Did you or did you not
send it back to San Francisco? A. I don't remem-
ber. Q. Was anything said in the letter about the
proxy and as to who was to have this proxy? A. I
think he mentioned Mr. McMurtry 's name. Q. And
it was that Mr. McMurtry was to vote the stock ; is
that it ? A. Yes, sir. Q. And that is the stock that
stood in your name ; is that right ? A. I don't know
whether it was to vote the stock, but he was to be the
proxy, to vote his locator, or something of that kind.
Q. Well, then, when you got this letter in 1910, at
Platts Cove, you had already heard from [179 — 72]
Mr. Freeman to the effect that it looked as though
you were all going to get rich out of this thing? A. I
am quite sure it was previous.

This communication from Mr. Thorn was the
second one that I had concerning this matter after
signing the power of attorney. Think I met Thorn
in New York at the Knickerbocker Hotel at the same
time I met McMurtry, or the second time. I can't
say just when I did meet Thorn. I think I received
this paper, Government's Exhibit No. 1 by mail.
Am quite sure of that and think I received it from
[Mr. Thorn and must have met him before that. I
can't say when. I met him down town with Mr.

202 The United States of America vs.

(Deposition of Frank B. Chapman.)
Freeman but I can't tell where or what time. In
this letter enclosing this particular paper, Govern-
ment's Exhibit 1, as near as I can remember, Mr.
Thorn "wished me to sign this proxy and get it back
to him as soon as possible, because Mr. McMurtry
wanted to use it on or before a certain date." I
would not say positively whether I read it over. Yes,
I knew what it wras. I presume I read it; I must
have read it, but cannot say what was in it. I know
it was a proxy and as soon as I saw it I signed it
and sent it on.

Q. I will read it to you. (Proxy read.) Do
you understand the last portion of that paper which
I have just read to you? A. Well, the whole thing
is not clear, no, sir. Q. You understood when I read
this paper to you, that you were ratifying the power
of attorney which you had before given to Mr.
McMurtry, didn't you? A. I presume I did, yes,
sir. Q, And you understand English well enough
to know what you were putting your signature over
a paper which declared that that power of attorney
was in full force and had never been revoked or modi-
fied by you, didn't you? A. I didn't give it that
much thought. [180—73]

I don't believe I read it thoroughly. I won't say
whether I did or not. I don't remember to whom I
returned this proxy but think I returned it to Mr.
Thorn. May have sent it to San Francisco. That
is my signature on Exhibit No. 2, which is the same
as Exhibit No. 1 — the same as Government's Exhibit
1, with the exception of the date. I have no posi-

California Midway Oil Company et al. 203

(Deposition of Frank B. Chapman.)
tive recollection as to when or where I signed Ex-
hibit 2.

Q. Explain, if you can, why it is that two docu-
ments, reading exactly the same, with the exception
of the dates, were signed by you ? A. I signed any-
thing I was asked to ; when I signed the first one — I
signed anything they thought I wTas to give. Q. Who
asked you to sign the second one? A. I cannot re-
call.

Dont remember how long I kept the second paper
before signing or where I signed it. Believe I signed
one at Kenosa Lake, New York. My attention be-
ing called to the fact that this Exhibit 2 was acknowl-
edged in Luzerne County, Pennsylvania, I will say
that I wras at Wilkes-Barre, Pennsylvania, which I
think is in Luzerne County. 'I don't remember going
before a notary then. Am confused on that point.
I signed it and must have gotten it, but don't remem-
ber how I got it. I thought so little about the thing,
I don't remember what I signed. Between the dates
of the signing of these two papers, I first recall hav-
ing seen Freeman or receiving a letter from him.
Correcting my former testimony will say that my
present salary is three thousand dollars a year in-
stead of $300.00 a month. Don't remember when I
met Mr. Searls. Think it was at the Knicker-
bocker the second time I met McMurtry. Don't re-
member the date or the circumstances. Cannot say
that I didn't meet him at the time I signed the power
of attorney for the location of lands in California.
Have no way [181 — 74] of fixing the time when I

204 The Untied States of America vs.

(Deposition of Frank B. Chapman.)
met Searls. Don't know who introduced me to him.
I recall the only time I met McMurtry aside from
the time I signed the power of attorney was at the
Knickerbocker, some time after signing the power
of attorney. Don't recall just when it was. Don't
think I met McMurtry between the time of signing
the power of attorney and the execution of the rati-
fications. Don't remember meeting Searls during
that time, or Freeman. Don't recall signing any
papers in connection with this matter between the
signing of the two ratifications. Yes, if I did it
was in good faith as far as I knew. Would say I
met Searls about three times in all. Don't think I
ever met Freeman after signing the power of
attorney until I met him in San Francisco when I
was a witness.

Q. How many times did you meet Mr. Thorn from
the time you signed your power of attorney up to
the time you wTent to San Francisco? A. I would
say three or four times. Q. Can you tell me the place
or places w7here? A. Why, I recall once when he
came after my proxy at Kenosha Lake and on the
train at Middletown, and I believe he was present
when I met Mr. McMurtry the second time at the
Knickerbocker Hotel.

I think I had met McMurtry twice before going to
San Francisco ; the first time, the time I signed the
power of attorney and the second time at the Knick-
erbocker Hotel. I think Freeman, Thorn and Searls
were present at the Knickerbocker Hotel, when I
saw McMurtry. They are only the only ones I know.

California Midivay Oil Company et ah 205

(Deposition of Frank B. Chapman.)
I have not a definite recollection of Freeman being
there. It is possible that he was not. Think Free-
man phoned me that McMurtry was at the Knicker-
bocker and wanted to see me and that Freeman was
present at the interview. Am quite positive he was
there. Would not say positively, but think Searls
was there and also Thorn. Don't [182 — 75] re-
call anything that Freeman said to me at that time,
or Searls or Thorn. The conversation was between
McMurtry, I think, and the rest who were present.
I don't recall what was said by a single one other
than McMurtry. I recall that someone phoned me
that " McMurtry was on from the west and would
like to have me come up and meet him and hear
what he had to say, or words to that effect. ' '

Q. Well, you went. A. Yes, sir, and I told him
I was very busy, but I would try to come up.

No, I had no other business with McMurtry except
because of this power of attorney. Yes, I went there
during business hours the same day that I was
phoned. Stayed there about fifteen minutes, possibly
longer. Have not read over the testimony that I
gave in San Francisco, nor has it been read to me.
Have no copy of it. Have no epitome of it. At this
meeting at the Knickerbocker Hotel, all I recall is
what Mr. McMurtry said, and I dont recall all of
that, but he told of what a hard time he had had
to hold the locations for lands, or something of that
kind; that he had sat up nights, etc., to keep on the
job ; and I think at that time he said that there were
some moneys coming to us, but they did not have it ;

206 The United States of America vs.

(Imposition of Frank B. Chapman.)
they were in pretty hard shape, and I think he said
that he was going, they were going to form a com-
pany for the locators, or something to that effect.
That was all I remember.

Q. Did he speak about having advanced moneys
and paid out moneys? A. Yes, I think he did. Q.
Did he speak about the assessment work that was
done ? A. I believe he mentioned that in connection
with his experience. Q. And did he speak about
making a contract for drilling for oil upon some of
those lands with somebody? A. I don't recall that.
Q. Did he speak about the prospective value of
these lands. A. Not that I recall. [183—76]

Don't remember that he said where the lands were.
Yes, think he said something about somebody trying
to jump the land that he had located. Don't recall
that he spoke of risking his life prospecting lands or
that he was guarding them with guns. Don't recall
having heard from Freeman, Searls or Thorn any-
thing about jumpers or trouble in holding these lands,
or borrowing money in order to protect his interests
that he had located. As near as I can recall, it was
McMurtry who told us this at that time.

Q. Did he say anything about your being entitled to
any money at that time? A. I think so. Q. What
did he say in that regard ? A. I think he said we were
entitled to — I think he said we were entitled to $250,
or something of that kind.

No, he didn't give it to me. He said they were
in hard shape, financially. No, I did not then tell
McMurtry, " What have I got to do with that ? That

California Midway Oil Company et ah 207

(Deposition of Prank B. Chapman.)
does not interest me." No, I did not repudiate the
transaction at that time and say to Mr. McMurtry,
"Why, you have not got any money from me," nor
that the fact that he was risking his life protecting
these lands did not concern or interest me. I do not
recall that he told me that I could look for $250 out
of the enterprise or give me any encouragement as to
an early return.

Q. No. Didn't tell you a word about having made
a contract, and that it would depend upon whether
the locators ratified the contract or not, as to w7hether
he would get any money out of it or not, did he ? A.
He might have mentioned that ; I believe he did say
something about it, that it depended upon what the
Government did, or something of that kind. Q. Did
he also tell you at that time that he expected a little
trouble with the Government on account of with-
drawals? A. I don't remember withdrawals, or
[184 — 77] just what he said. Q. But you now have
a recollection that he did speak to you about the fact
that he had made a contract with somebody for some-
thing on all of these lands that had been located,
and it was necessary before he got any money out
of it, to get a ratification from the locators? A. I
don't remember that. Q. You just said a little while
ago, as I understood you, that you could recall some-
thing about a contract ? A. No, not about a contract,
he did not, but about what the Government would do,
and as to whether they could hold the lands.

No, I don't recall at this meeting Mr. McMurtry
making any allusion to the fact that he had received

208 The Untied States of America vs.

(Deposition of Frank B. Chapman.)
my ratification of such contracts, No, I received
nothing at all at that meeting. Do not recall that I
signed anything at that meeting, but will not say
that I did not.

Q. I show you check 159, dated New York, Sep-
tember 11, 1911, signed P. H. Searls, which has your
signature under the following language :

" Received from L. B. McMurtry, $250, in full
payment for all my right, title and interest in
and to all lands located by said L. B. McMurtry,
on my behalf, in Kern County, California, pur-
suant to a power of attorney made by myself and
others to L. B. McMurtry, bearing date the 21st
day of December, 1907. "
Will you testify positively that you did not put
your name on the back of that check under that writ-
ing at the Knickerbocker Hotel in 1911, in the pres-
ence of Mr. McMurtry and Mr. Searls % A. No, sir.
Q. You will not so testify ? A. No, sir.
Q. And so far then as your present recollection
is concerned, it might be true that you did put your
name on the back of that check at that time and
place? A. It might be possible. [185—78]

My attention being directed to certificate No. 27
for 1000 shares of stock in the Pacific Oil Lands
Company, issued to Frank B. Chapman dated Sep-
tember 1st, 1911, and the receipt attached to the
margin of that certificate pasted in the stock certi-
ficate book, which receipt reads: " Received certifi-
cate for 1000 shares of Pacific Oil Lands Company,
dated September 11th, 1911'," I cannot say where I

California Midway Oil Company et at 209

(Deposition of Frank B. Chapman.)
was on September 11, 1911, or what I did with this
receipt after signing it. At the time I received this
five hundred dollar bill from Mr. Searls, he handed
me a check which I signed and then he handed me
the bill.

Q. Did you receive five hundred dollars for the
check or did you receive five hundred dollars for
your stock ?

A. I suppose the check was for the stock.

Q. Did you sell your stock to Mr. Searls?

A. I turned it over to him.

I think this was at the Knickerbocker Hotel,
though it may have been some other hotel. It was
not on the occasion that I met McMurtry there.
It was afterwards. It was in Searls' room and I
think at the Knickerbocker Hotel. I am certain it
was in New York. No one else was present besides
Searls and myself. I went to his room and after
the formal shaking of hands, he said, "Did you bring
your stock?" — this is approximately — and I said
"Yes," and he said, as near as I can remember, he
said, "Well, I want you to turn it over to me, be-
cause," he said, "we may have some trouble," or
something like that, "with the Government," or
something, "in holding your patents, and you will
never get any more out of it anyway," and "you
will possibly never have another occasion; it will
never be worth any more, and we are going to pay
you for the favor you did us, if that will do it."
I said to him, I said, "I don't see what I have done,
Mr. Searls, to warrant this receipt of this money,"

210 The Untied States of America vs.

(Deposition of Frank B. Chapman.)
and lie said, "Well, that [186—79] is all right,
you have done the same as the rest of the locators,
you gave us a power of attorney, and we think it is
worth that much" or words to that effect. So he
says, "Have you got the stock with you'?" And I
said, "Yes," and I gave it to him, and he took out
his purse and he said, "You sign this paper," which
I did, and he handed me a five hundred dollar bill.

Q. Now, Mr. Chapman, repeat to me, after telling
me the place where it was held, any conversation
that occurred at the time that you got the certificate
for 1000 shares of that stock.

A. As I recall it, both shares were mailed to me in
one envelope.

Q. When you say "both shares" what do you
mean? A. Both certificates.

Q. What do you mean by "both certificates"?

A. I received one for 1000 and the other for 700
or 750.

Q. Mailed to you by whom ? A. I do not recall.

I think they were sent by Mr. Thorn. Don't re-
call that any letter came with them. No, I had no
transaction whatever with Mr. Thorn which war-
ranted him in sending me these certificates. I as-
sumed he was acting as an agent for Mr. McMurtry.
I cannot say why McMurtry sent them. I believed
at the time that it was in payment for this $250, or
something of that kind, that he claimed was due us.
Yes, all of this was after this conversation with
McMurtry, and I think after I received a letter from
Freeman at Cumberland, Maryland, telling me I

California Midway Oil Company et ah 211

(Deposition of Frank B. Chapman.)

might get rich out of this thing, or something to that

effect.

Q. But you had been advised, as you have already
testified, by Mr. Freeman as to the possibility of
getting rich, and by Mr McMurtry as to the trouble
that he was having with the holding of these lands,
and by Mr. McMurtry as to the making of a contract
or contracts for the sale of these lands'?

Mr. HALL. — I do not wish to interrupt counsel
any more than [187 — 80] is necessary, but, in
order that the Court, before whom this cause has to
be finally heard, may not misjudge my silence, I want
to now protest against the extended and useless and
argumentative cross-examination of this and all
other witnesses.

A. The first two, yes ; the last one, I cannot, I am
not sure of.

Q. Notwithstanding the fact that in the year pre-
vious you had ratified the contract that he had made
in your name, still you are not sure that you knew
him? A. I presume I did at the time.

Q. When Searls told you that he wanted to give
you something for what you did and you had better
take five hundred dollars or maybe you would not get
anything the next time, or something to that effect ;
and, in order not to be taken to task by Mr. Hall,
I am only undertaking to state the substance of your
answer, and in order to cure any possible defect in
his quotation, I refer to the last answer that you
made as to the conversation with Mr. Searls, did
you suggest to him that the statement had been made

212 The United States of Ameriea vs.

(Deposition of Frank B. Chapman.)

to you by Mr. Freeman that you were going to get

rich out of these locations'?

A. I don't think so, no.

Q. Did you tell him at that time that you knew
that a contract had been made for the sale of these
lands, and asked him how much money had been real-
ized from them? A. Not that I remember.

Q. Did he make a report to you as to what had
become of it? A. I don't think he did.

Had only one talk with Mr. Searls and that was
at the Knickerbocker Hotel at the time he gave me
a check which I endorsed, and in lieu of the check
he gave me a five hunded dollar bill, and it was on
that occasion that I endorsed the stock and gave it
to him. He had either phoned or left word with my
landlady for me to come to the hotel and bring the
stock.

Q. Mr. Chapman, what reason had Mr. Searls as-
signed to you desiring to buy your stock for $500
and in the same breath to tell [188 — 81] you that
if you did not take $500, that you would probably
not get anything. What reason did he give you for
that stand?

A. Well, he said they expected, I think — they were
having some trouble with their patents, etc., and
things were in an unsettled state, or words to that
effect, and things were uncertain.

I don't recall asking him what the nature of the
trouble was or his telling me or that he spoke of the
fact that some of the lands had been disposed of to
Mr. McLeod, the Associated Oil Company, or any-

California Midway Oil Company et al. 213

(Deposition of Frank B. Chapman.)

body else. Don't recall that he said anything about

the land having been withdrawn after locations were

made.

Q. Did he tell you that he was buying this stock
for himself or somebody else ?

A. He said they were simply redeeming it, that
was all.

Q. Had he told you that he had any interest in
that land, or in that corporation? Why, I believe
he did.

Don't know that he told me that he was one of the
locators but I assumed that he was. He did not tell
me he was selling his stock for the same amount of
money or tell me who the bearer was. The reason
he gave why the stock was wanted was that "They
might have some trouble in holding their patents, or
holding the lands." No, I don't recall receiving a
letter at the time I received the stock advising me to
hold it and it w^ould probably be very valuable,
though I will not say that I did not. Put my sig-
nature on the back of this certificate of stock trans-
ferring it to Walter S. Brann at the time I met
Searls at the hotel, I think. It might have been
then or it might have been before, I don't recall.
Don't remember that Brann 's name was on there
when I signed it. Have no recollection of putting
my signature on there at the time I gave the certi-
ficate to the young lady to whom I was practically
engaged at that time. She had it from the time I
handed it to her when I received it, to the time when
it was surrendered to [189 — 82] Mr. Searls, I

214 The United States of America vs.

(Deposition of Frank B. Chapman.)
should say approximately two years. Never had
any falling- out with Mr. Freeman. Don't recall hav-
ing any talk with Thorn about the sale of this one
thousand shares of Pacific Oil Company stock
or about its value. When I disposed of this one
thousand shares, the other 750 shares of whatever
company it was went with it. All of this stock was
given to the lady. She had the whole thing. I don't
know that I gave it to her outright; I handed it to
her, and that was all ; I did not turn it over to him,
or anything of the kind.

Q. I misunderstood you. I thought you had given
it to the lady as a present I

A. Well, she could have had it.

Q. Oh, I suppose she could have had anything you
had?

A. Yes, sir, or anybody else could have had it.

Q. But nobody else could have had the five hun-
dred dollars which you got?

A. Well, they could have had it the day before.

No , I didn't know when I received this $500 what
McMurtry had received for these lands.

Q. But you did hear when you were in San Fran-
cisco at the time you got this five hundred dollars
he had already received a large sum of money, up
in the millions, for these properties that were
located?

A. Well, I don't know that I heard any definite
date or when it was received.

Q. Didn't you ask? A. I don't think I did,

Q. You didn't pay enough attention to it when

California Midway Oil Company et ah 215

(Deposition of Frank B. Chapman.)

you were in San Francisco to ask any questions

about it ? A. No, sir.

Did not hear McMurtry's testimony though I
heard one or two testify.

Q. I want you to explain me, if you can and will,
why the day before you sold the stock to Searls for
$500, you said you were willing to give it to anybody
for nothing?

A. I did not [190 — 83] expect any money for it.

Q. Yes.

A. And I thought when Mr. Searls asked me to
come down, he wanted the stock back.

Q. Now, I want you to explain how and why you
say that on December 13th — I want you to explain
why it is you can say you had given that stock away
and asked no questions about it, when, on the pre-
vious December, and the 13th of that month, you
signed a consent as a stockholder in the Pacific Oil
Lands Company, that that corporation should set
aside $20,000 in cash assets to be declared as a divi-
dend upon the stock of that corporation, and also
such other sums from time to time as the Board of
Directors in their discretion might deem advisable ;
I want to know your reasons for being willing to
give away stock of any corporation which you con-
sented in the December previous that they could pay
a dividend of $20,000?

A. Because I never expected to get a cent out of
it when I signed it.

Q. Did you think it was a fake when you signed
that consent to a dividend of $20,000?

216 The United States of America vs.

(Deposition of Frank B. Chapman.)

A. I had no confidence in it.

Q. Did you think it was a fake when you signed
your consent to a payment of a $20,000 dividend?

A. What do you mean by "fake"?

Q. I will answer your question by asking you to
tell me what you thought you were doing when you
signed a consent to the Board of Directors of that
company as a stockholder to declare a $20,000 divi-
dend?

A. I cannot tell you what I thought at that time.

Q. Who got you to sign Exhibit No. 6, a consent to
a $20,000 dividend, dated December 13, 1913?

A. I cannot tell you. Nor can I tell when I signed
it nor what I did with it. Don't remember signing
it. Hearing it read I still do not remember signing
it nor do I recall receiving a dividend. [191 — 84]

Redirect Examination.
Q. In your cross-examination you have referred
to signing two proxies. I invite your attention to
Government's Exhibit 1 and Government's Exhibit
2; are those the papers which you designate as
proxies? A. I do not recall signing this one (in-
dicating) but I assume it was a proxy; and I do
recall two instances when I signed papers very
vividly, because I was on my vacation in each in-
stance, and Mr. Thorn came to Kenosa Lake for the
last one, and I signed it in his presence, but whether
that was the proxy — I think it was the proxy; I
don't see that here. Q. The first time you met Mr.
McMurtry was when, before or after you had signed
the power of attorney? A. After. No, I don't

California Midway Oil Company et al. 217

(Deposition of Frank B. Chapman.)
think I was asked to put up any money on account
of the improvements on these lands at the time I
had the conversation with McMurtry at the Knick-
erbocker Hotel. [192—85]

Deposition of Charles W. Gardiner, for Plaintiff.

CHARLES W. GARDINER, called April 16,
1917, on behalf of the plaintiff, testified by deposi-
tion as follows :

Reside at 235 North Pine Avenue, Chicago, Illi-
nois; am a physician and manufacturer, manufac-
turing steel cabinets and makers of clamps. In
December, 1907, my home was in New York, and
was temporarily in New York City. Did not have
any occupation. Am a practicing physician, grad-
uate of the University of Vermont '91. Not now
practicing to any large extent. Am the Charles
W. Gardiner who, together with others, executed
the power of attorney, Plaintiff's Exhibit 5. Signed
it on the representation of a friend of mine, Prank
H. Searls. Had known him since boyhood days.
Was not very intimately associated with him. It
was about a couple of wTeeks before executing this
paper that he asked me to do so. My remembrance
is this occurred at his place of business on East
Sixteenth Street, New York City. He set forth
that they were trying to get several of their friends
to — I do not recall whether it was to enter into
an agreement — as I understand it, it was to go in it
together for the purpose of attempting to discover
or locate certain properties. They were Mr. Thorn,

218 The United States of America vs.

(Deposition of Charles W. Gardiner.)
Mr. Searls and a number that I did not know at
that time. Was not at that time acquainted with
Mr. L. B. McMurtry. He set forth that there was
an opportunity of attempting to locate certain lands
for something or other, it might be metals or oil
or some other matter, and that there was an oppor-
tunity and probability that we might discover
something and thereby get a profit out of it. Un-
derstood that the lands were in California, and they
might be elsewhere. Saw Searls practically every
day. The next time I recall discussing this par-
ticular subject was at Batavia, New York, after
signing the power of attorney. The day the power
of attorney wTas executed he told me to go down
to a certain building near the United States Post-
office in New [193—86] York City, and that I
would find there Mr. Thorn, whom I had met, and
I was to execute before a notary a power of attor-
ney to Mr. McMurtry. I read over this power of
attorney. The next time I talked to Searls about
this was at Batavia, New York, about six months
later. Nothing wTas then said except that in his
opinion it was going to probably turn out to be a
good thing. Remember several circumstances in
connection with this transaction, but the order in
which they occurred I cannot swear. Remember
receiving a communication, I think from Mr. Searls
— I don't know whether it came from Mr. Searls
or not — I received a communication asking me to
verify the power of attorney which I had given to
Mr. McMurtry. I should say that is my ratifica-

California Midway Oil Company et ah 219

(Deposition of Charles W. Gardiner.)

tion. I recognize the duplicate signature and that

of the notary.

(This ratification read in evidence as Plaintiff's
Exhibit 7. It is similar in form to Plaintiff's Ex-
hibit 1 with the deposition of Prank B. Chapman,
and purports to have been executed August 15,
1910.)

This paper came to me by mail. I don't remem-
ber from whom. There was a letter accompanying
it which has been destroyed or lost. It said that
it was desirable to verify the pow7er of attorney that
I had given ; of course some reason must have been
given, but I cannot explain now7 just what that let-
ter said. My recollection is that I fonvarded it
to Mr. McMurtry's office in San Francisco. Think
I received it from McMurtry. Was not then per-
sonally acquainted with McMurtry. The next in-
cident growing out of these transactions that I re-
member w7as signing a proxy for Mr. McMurtry
to vote for me at a counsel meeting. My remem-
brance is that I received it from McMurtry and
returned it to him. Do not remember the date.
It was for the purpose of voting my interest in
the matter which Mr. McMurtry had in hand.
[194—87]

I received shares of stock but don't remember
w7hether it w7as before or after that particular time ;
received no money or other thing of value at the
time I executed this ratification. Later I remem-
ber receiving a check for twenty dollars. Think
it came from McMurtry's office. Don't recall

220 The United States of America vs.

(Deposition of Charles W. Gardiner.)
receiving any money prior to that, but I endorsed
a check for $250. Received no money by reason of
endorsing that check. That is my signature on
the back of check dated New York, May 6, 1911,
No. 149, drawn on the Second National Bank of
the City of Newr York, payable to the order of
Charles W. Gardiner, for the sum of $250.00, and
signed F. H. Searls. Cannot give the date that I
first saw this check.

The circumstances of signing that check are that
in a conversation with Mr. Searls he asked me if I
preferred to receive some cash or some stock and
my reply was that I preferred to take the stock.
The check w^as sent to me and I endorsed it and
returned it to Mr. Searls and the stock was subse-
quently sent to me. It w7as stock in the Columbus
Midway Oil Company. I think 750 shares. My
remembrance is that this matter of the check and
shares of stock in the Columbus Midway Oil Com-
pany came up by correspondence with Mr. Searls.
Think this letter is probably destroyed. Had no
further conversation with Searls concerning this
check than I have stated. My understanding that
this Columbus Midway stock issued to me was my
interest as a locator under the power of attorney
given to Mr. McMurtry.

(Check No. 149, for $250, dated May 6, 1911, pay-
able to Charles W. Gardiner, similar in form to
Defendant's Exhibit "T," read in evidence.) (See
Plaintiff's Exhibit 50.)

I read the endorsement on the back or this check

California Midway Oil Company et ah 221

(Deposition of Charles W. Gardiner.)
before I signed it. Don't think there was anything
in the language that I didn't understand. Cannot
remember that I had then been advised [195 — 88]
that any locations at all had been made by Mr. Mc-
Murtry acting as the attorney in fact of myself and
others in the State of California. That is some-
thing I cannot remember. Did not know at that
time howT many locations had been made under the
mining laws by Mr. McMurtry as my attorney in
fact in the State of California. Cannot swear that
at any time I was advised as to the number of
locations on the public domain that were made by
Mr. McMurtry acting as my attorney in fact under
this power of attorney. Cannot swrear that I was
informed of all this. Don't remember when I was
advised of the number of locations upon which my
name had been used, or how7 long it was after the
signing of the power of attorney. Don't know
whether or not I knew what my interests were in
oil lands in California that had been located by
Mr. McMurtry acting as my attorney in fact when
I signed this check No. 149.

I read this ratification before signing it. Don't
remember whether previous to that time I had been
advised that any locations had been made by Mr.
McMurtry on the public domain acting as my attor-
ney.

Q. At the date you executed the ratification, did
you know what lands wrere affected by the contract
of August 4, 1910, between Mr. McMurtry and your
attorney in fact and W. P. Herrin and others? A.

222 The United States of America vs.

(Deposition of Charles W. Gardiner.)
I don't recall the circumstances. Don't remember
whether the contract between L. B. McMurtry as
my attorney in fact with W. F. Herrin, of date
August 4, 1910, was exhibited to me at or prior
to the time that I executed this ratification. You
are asking me questions that I really cannot answer.
I don't remember. Q. Did you, at the time you
executed Exhibit 7, know anything about the con-
tract between McMurtry and Herrin and others, of
date August [196—89] 4, 1910, or of the lands
which were affected by it? A. I wish I could an-
swer your question, but I don't want to evade your
question. Q. I don't think you do, Mr. Gardiner.
A. But those are matters that are very hazy in my
recollection, and I don't want to make a misstate-
ment. Q. Did you, prior to the time that you exe-
cuted Exhibit 7 on August 15, 1910, seek any in-
formation or advice as to the contents, purpose, or
effect of the contract of date August 4, 1910, from
any person whomsoever? A. Yes, through Mr.
Searls. Q. What advice did Mr. Searls give you
as to the purport and effect of the contract of
August 4, 1910, or the lands that were affected by
such contract, if he gave you any advice ? A. You
mean about ratifying the power of attorney ; is that
what you mean? Q. Yes. A. He advised me to
do it; he advised me to ratify the former power
of attorney wThen the papers were sent on to me. Q.
What reason did Mr. Searls give you at that time,
if any, wThy you should sign this ratification? A.
To facilitate the work of Mr. McMurtry in the prem-

California Midway Oil Company et dl. 223

(Deposition of Charles W. Gardiner.)
ises. Q. Did you seek at that time, from Mr.
Searls, any information with respect to the quantity
of land that was affected by the contract between
Mr. McMurtry and Herrin and others, of date
August 4, 1910? A. Not that I remember of. The
only correspondence or communication I had with
any person during 1909 and 1910, with respect
to these transactions wras personal correspondence
with Mr. Searls and "what may have been sent to
me as reports from Mr. McMurtry 's office." I have
none of them now. They have been lost or de-
stroyed.

Q. Those were received during the year 1909 and
1910, were they? A. I don't remember. Q. Well,
did you receive any reports from Mr. McMurtry 's
office prior to the time you executed this check 149 ?
A. I cannot answer that either; I have no [197 —
90] record of the matter and I cannot remember.
Q. What information was there contained in those
reports that you received from Mr. McMurtry 's
office? A. I have a remembrance of a report from
his office, but the date I do not remember, telling
of certain activities in the field, but that is as far
as I can remember ; I cannot remember the purpose
of the report, except that they said something about
what had been done.

At the time I signed my name on the back of
check No. 149, dated May 6, 1911, I understood that
McMurtry was making arrangements with some
party to work, to prospect. As I understood it,
they did not have enough funds to develop it as

224 The United States of America vs.

(Deposition of Charles W. Gardiner.)
they wanted to, and they had to make arrange-
ments with somebody else to do it for them.

Q. Who was it that didn't have any funds'? A.
The locators through the power of attorney to Mr.
McMurtry. Had you at that time been called upon
to contribute any money or means towards the
development of any property located by the use of
your name? A. No, sir. Q. At the time you
signed check 149, did you expect to be called upon
to contribute any funds towards the development
of the property which had been located by the use
of your name? A. That would depend upon con-
ditions. Q. What was the exact state of your mind
on that question? A. Why, we were trying to find
something and if we found a good prospect, we
would have to get some money to develop it and
I wrould be expected to put in my share. If it was
a good prospect, why, I would take it up in some
way. Q. Did you have that expectation at any time
after you signed this check 149? A. Yes. It was
all according to the outcome of the location and
the procedure. Q. Mr. Brann has produced the
original stock-book of the Pacific Oil Lands Com-
pany, and I invite your attention to certificate
[198 — 91] No. 30, which was issued on September
1, 1911, and shows that Charles W. Gardiner was
entitled to 1000 shares of the capital stock of the
Pacific Oil Lands Company; attached to the stub
of that certificate is the following: " Received cer-
tificate No. 30 for 1000 shares of Pacific Oil Lands
Company, dated September 11, 1911. Charles W.

California Midway Oil Company et al. 225

(Deposition of Charles W. Gardiner.)
Gardiner.' ' That is your signature to that receipt
(showing witness) ? A. Yes, sir. Q. Endorsed on
the back of that certificate No. 30 is the following :
"For value received hereby sell, as-
sign and transfer unto Walter S. Brann

shares of capital stock represented by the with-
in certificate, and do hereby irrevocably con-
stitute and appoint Walter S. Bfann the trans-
feree of said stock on the books of the wTithin
named corporation, with full power of substitu-
tion in the premises.

Dated 19—.

CHARLES W. GARDINER,
In the presence of

Is that your signature to the bottom of that
(showing witness) ? A. Yes, sir. Q. Why was
this certificate No. 30 for 1000 shares of stock issued
to you? A. It w^as part of my share in the pro-
ceeds resulting from the location furthered by Mr.
McMurtry. Q. At the time this certificate No. 30
was issued to you, or about that time, you had also
received a certificate in the Columbus Midway Com-
pany? A. That is my remembrance. Q. Had you
received any money growing out of these transac-
tions at that time? A. Yes, sir. Q. How much
money had you received? A. I don't knowT that
I had received it at that time, but it may
have been before and it may have been after,
probably after I received — I don't know
whether you would call it a [199 — 92] dividend

226 The United States of America vs.

(Deposition of Charles W. Gardiner.)
or a division of twenty dollars. Q. Who tendered
this certificate No. 30 in the Pacific Oil Lands
Company to you? A. My remembrance is that it
was sent to me by Mr. Searls. Q. Was that sent
TTv letter? A. I believe so. Q. Have you the let-
ter now? A. No, sir. Q. What has become of it?
A. I believe it is destroyed. I did not keep those
things. Q. What did Mr. Searls say, in substance,
if you cannot give us the entire letter, as to why
he was sending you this Pacific Oil Lands Com-
pany stock ? A. I understood that under the work-
ings of the power of attorney given to Mr. Mc-
Murtry, that I wras to have my share, and this was
part of the share of — that came out of the proceeds.

Q. I am asking you to give me the substance of
what Searls said in that letter, and not what your
idea was, but what Searls said in that letter? A.
I don't remember just what he said, but I suppose
it was, in substance, what I have just stated.

No, did not know at that time what the assets
of the Pacific Oil Land Company were. Yes, I
presume I had then heard of the contract dated
August 4, 1910, and the supplemental contract dated
August 6, 1910, between McMurtry and Herrin
and others, affecting the lands in Kern County,
upon which my name had been used as a locator.
Cannot say that I then knew7 the terms and condi-
tions of these contracts. I now understand that
"there was an arrangement being made for part of
the property to be developed by the company or a

California Midway Oil Company et al. 227

(Deposition of Charles W. Gardiner.)
party whose name I cannot state, and that I was
to have certain, expected certain returns from this
procedure; was to receive my pro rata share among
the locators. After expenses were paid and Mr.
McMurtry was reimbursed for his services, I ex-
pected that the returns wrould be divided among the
locators. Yes, I read the certificate No. [200 — 93]
30 when I received it. Don't know whether I knew
at that time that the contract of August 4, 1910,
and the supplemental contract of August 6, 1910,
had been assigned . by McMurtry as my attorney
in fact to the Pacific Oil Lands Company. At the
time I signed the check No. 149 on May 6, 1911,
I believe I had heard of the contracts of August
4 and August 6, 1910, from Mr. Searls. Believe
he advised me of the contents of those contracts
and the purposes of making them. In a general
way I was then familiar with those contracts, was
acting under the advice of my friend Mr. Searls.
Cannot say what advice he gave me as to the pur-
pose of making those contracts. Yes, at the time
certificate No. 30 came into my possession I believe
I knew the number of shares of stock of the Pacific
Oil Lands Company, but don't remember now what
they were. Believe I must have then had a general
idea as to what distribution had been made of the
capital stock of the Pacific Oil Lands Company.

Q. Were you advised of the fact when you re-
ceived your certificate of shares in the Pacific Oil
Lands Company that on September 1, 1911, 999,997
shares of stock in the Pacific Oil Lands Company

228 The United States of America vs.

(Deposition of Charles W. Gardiner.)
had been issued to L. B. McMurtry, that on the
same date one share of stock had been issued to
Harold H. Maundrell, and one share of stock issued
the same date to Esther Harris, and one share on
the same date issued to Walter S. Brann? A. I
don't remember. Q. Were you advised when you
received your share of stock that on September 2,
1911, L. B. McMurtry transferred to F. E. Har-
rison, 140,000 shares of the capital [201—94]
stock of the Pacific Oil Lands Company? A. I
don't remember. Q. Were you advised at the time
that you received your certificate that on Septem-
ber 1, 1911, L. B. McMurtry transferred to E. W.
Kay, 130,000 shares of the capital stock of the
Pacific Oil Lands Company? A. I don't remember.
Q. Were you advised at the same time that L. B.
McMurtry transferred on September 1, 1911, to
Fred B. Hughes, 90,000 shares of the capital stock
of the Pacific Oil Lands Company? A. I don't re-
member. Q. Were you advised at the date you re-
ceived and accepted your certificate No. 30, convey-
ing to you or transferring to you 1,000 shares of
stock in the Pacific Oil Company that each of the
locators had also received a certificate, or that there
had been issued to each of the locators a certificate
transferring or conveying to them 1,000 shares of
stock in the Pacific Oil Lands Company, and that
the balance of the stock was held for the use and
benefit of persons other than those wThose names
appeared as locators of the lands which were
affected by the contracts of August 4th, and the

California Midway Oil Company et ah 229

(Deposition of Charles W. Gardiner.)
supplemental contract of August 6th, 1910? A. I
don't remember; I cannot answer that question.

Don't know how long I retained this certificate
No. 30. It might be a couple of years. Sold it to
Mr. Searls. He explained to me that, under the
contract, or lease, or whatever it was, with the par-
ties wTho were working certain territory, from them
I might expect to receive certain moneys or divisions,
or dividends, very uncertain, according to circum-
stances, and asked if I desired to continue under
those conditions, or if I had rather take a lump
sum and dispose of my interest. I preferred [202
■ — 95] the lump sum and disposed of them to Mr.
Searls. He paid me $500.00 in cash for the stock.
My remembrance is that I also surrendered the
stock in the Columbus Midway. Cannot say that
any of the lands which my name was used to locate
were then held or claimed by the Columbus Midway
Company. I believe they were. Cannot say what
lands. Imagine it must have been during 1914 that
I delivered this stock to Searls. Cannot say what
other interest or interests I claimed in any of the
lands located by the use of my name at that time.
I was relying upon my friend Mr. Searls to look
after my interests in those matters. Cannot say
that I had any other evidence such as papers or
writing or any verbal promise as to any interests
in any of those lands.

Since I have surrendered this certificate and since
I signed check 149, if there was anything I might
do rightfully under those premises, I expected that

230 The Untied States of America vs.

(Deposition of Charles W. Gardiner.)

Mr. McMurtry, acting under the power of attorney,

would look after my interest.

Don't know that McMurtry has given me any
money or promise or anything else since I surren-
dered this stock in the Pacific Oil Lands Company,
nor do I remember that this company has given
me any evidence or any interest since then. Don't
believe now I have any interest in the Pacific Oil
Lands Company, and don't remember that I have
ever exercised the rights of a stockholder in the
Pacific Oil Lands Company since I surrendered this
certificate No. 30.

The details of the locations I don't know about.

Q. Did you know the state of development of
those four placer mining claims (Minnesota, Mas-
sachusetts, New Jersey and Virginia) at the date
of the surrender of Certificate No. 30? A. I don't
believe I understood all of the conditions which you
[203—96] stated. Q. What conditions did you
know or understand at the time you surrendered
certificate No. 30? A. What I have just stated a
few questions ago, or a few answers ago. Q. You
misunderstand me. I am asking you now exactly
what you knew as to the state of development of
those four placer mining claims at the date you
surrendered certificate No. 30?

Mr. ANDREWS. — You mean of his own knowl-
edge?

Mr. HALL. — Of his own knowledge, or by in-
formation from any person.

A. I don't believe I can answer that question. Q.

California Midway Oil Company et al. 231

(Deposition of Charles W. Gardiner.)
Did you have any knowledge as to the state of devel-
opment at that time ? 'A. I have a remembrance of
a report sent to me from Mr. McMurtry's office re-
garding the California locations, but whether that
referred to the exact part as you just state or not,
I don't remember. Q. I invite your attention to
three sheets of typewriting matter bearing the head-
ing, "Pacific Oil Lands Company." First Report
to Stockholders." In pencil, " Jan. 1914," and over
in the upper left-hand corner the initials "H. A."
and "F. H." Is that the report you had at that
time (showing witness) % A. I believe it is the same
report that I received or a copy of it.

Think I had received and read a copy of this report
prior to delivering this stock to Searls and under-
stood its contents in a general way. While I had
this stock certificate I think I received a check
for $20.

Q. I invite your attention, Dr. Gardiner, to check
No. 1193, dated San Francisco, January 8, 1914,
drawn on the Bank of California, National Associa-
tion. Pay to the order of Charles W. Gardiner, for
the sum of Twenty Dollars, signed Pacific Oil Lands
Company, F. E. Harrison, Secretary and Treasurer,
L. B. McMurtry, Vice-President. On the back
thereof is the following, among other [204 — 97]
endorsements: "Pay to Batavia Clamp Com-
pany, Charles W. Gardiner. ' ' Is that your signature
on the back of that check (showing witness) ? A.
Yes, sir. Q. Is that the check you referred to as the
$20 you received? A. Yes, sir. Q. Why was that

232 The United States of America vs.

(Deposition of Charles W. Gardiner.)
check given to you or paid to you ? A. My share of
certain of the proceeds from the development of the
location. Q. Prior to the time you received that
check, had you signed any papers with respect to the
issuance or payment of any dividends by the Pacific
Oil Lands Company I A. I probably did, but I don't
remember. Yes, that is my signature on the paper
purporting to have been signed by Charles W. Gard-
iner and acknowledged before D. B. McKenzie, a
Notary Public, on August 13, 1913. As I remember,
it came from McMurtry's office by mail. Presume
there was a letter of transmittal. Cannot say. The
letter has been destroyed.

Q. Can you tell me the contents of it ? A. I was
asked to grant permission of this action and make
an affidavit before a notary, which I did, and return.

That is my signature on the paper which starts out
"Pacific Oil Lands Company," and dated December
9, 1913. Received these two papers at different
times. Received one in August. (The check and
papers above referred to are as follows:)

San Francisco, 1-8, 1914. No. 1193
THE BANK OF CALIFORNIA
NATIONAL ASSOCIATION,
San Francisco.
Pay to the order of Chas. W. Gardiner— $20.00—
Twenty and 00/100 Dollars.

PACIFIC OIL LANDS CO.
L. B. McMURTRY, F. E. HARRISON,

Vice-Pres. Secy. & Treas.

(Stamped in center) "The Bank of California
Clearing House, paid Jan. 19, 1914. ' ' [205—98]

California Midway Oil Company et ah 233

(Deposition of Charles W. Gardiner.)

(Back of cheek reads as follows:)

"Pay to Batavia Clamp Co. Chas. W. Gardiner.
Pay BANK OF BATAVIA, Batavia, N. Y., or order,
BATAVIA CLAMP CO.

Wells Fargo Nevada Natl Bank of San Francisco,
Pay only through Clearing House, 16, Jan. 19 1914.
Pay to the order of Any Bank or Banker, all prior
endorsements guaranteed. BANK OF BATAVIA.
50-308 Batavia, N. Y. 50-308. H. T. Miller, Cashier.

Pay to the order Wells Fargo Nevada National
Bank of San Francisco, Prior Endorsements Guar-
anteed, Jan. 17, 1914, California National Bank,
Sacramento, California, Fred W. Kiesel, Cashier.

Pay to the order of Any Bank, Banker or Trust
Co., All Prior Endorsements Guaranteed. Jan. 13,
1914, Columbia National Bank, Marine National
Bank, Buffalo, N.Y."

(Consent last above referred to is similar in form
to Plaintiff's Exhibit 6 with the deposition of Frank
B. Chapman, and purports to have been signed by
Chas. W. Gardiner, December 9, 1913.)

(Proxy last above referred to is similar in form
to Plaintiff's Exhibit 6 with the deposition of Frank
B. Chapman and purports to have been executed by
Chas. W. Gardiner, August 13, 1913,) [206—99]

Q. At the time you surrendered certificate No. 30,
had you been advised by anyone that on January 1,
1907, L. B. McMurtry, acting as attorney in fact
under the power of attorney dated in December,
1903, had located in the names of P. F. Blackman,
A. J. Eowley, Harry Sterling, W. Y. Husbands,

234 The United States of America vs.

(Deposition of Charles W. Gardiner.)
D. G. Cunningham, John Ryan, B. M. O'Neill and
James Clifford, the following placer mining locations,
to wit:

"Ella," embracing the southeast corner of section
34;

"Searls," embracing the southeast corner of sec-
tion 20;

"Illinois," embracing the southeast corner of sec-
tion 22;

"Margaret," embracing the southeast corner of
section 26 ; all in Township 31 South, range 23 East,
in Kern County, California?

A. I don't remember. Q. At the time you surren-
dered certificate No. 30, had you been advised that
L. B. McMurtry, acting as attorney in the fact for
the eight persons whose names I have last given, en-
tered into a contract with Mr. J. M. McLeod, for
the development of the lands which I last described ?

Q. The contract I refer to having been dated on or
about October 8, 1908? A. I don't remember. Q.
Was there any contractual — , A. Any what? Q.
Any contractual or other relations wThich existed at
any time prior to the surrendering of certificate No.
30, between yourself and your co-locators of the
"Minnesota," "Massachusetts," "New Jersey" and
"Virginia" claims, [207 — 100] and the eight per-
sons whose names I have read, who wTere the locators
upon the "Ella," the "Searls," the "Illinois," and
the "Margaret" claims? A. cannot answer that
question .1 don't understand what you mean. Those
particular points I don't remember about, even if I

California Midway Oil Company et al. 235

(Deposition of Charles W. Gardiner.)
had any knowledge of them. Q. Do you now remem-
ber of any arrangement between yourself and any
persons with respect to the lands embraced in these
four claims, to wit, " Minnesota," " Massachusetts,"
1 1 New Jersey, ' ' and ' ' Virginia y ' ? A.I don 't remem-
ber any. First met J. M. McLeod when I was in San
Francisco, in November and December, 1916. Do
not knowT when I first heard of him. Mr. Searls
might have told me, but further than that I have no
remembrance. Did not know Mrs. J. M. McLeod or
any of the members of the firm of Wheat, Wilson,
McLeod & Gordon, or any of the officers of the Buick
Oil Company, Associated Oil Company or Consoli-
dated Mutual Oil Company. I was in San Francisco
in November and December, 1916, at the request of
Mr. Searls in reference to the McMurtry location
proposition. He wired me and gave me a letter of
introduction to Mr. Helm, and called at my office
in Batavia. Said he was connected with the parties
who were working or had purchased certain of the
McMurtry locations. I don't know whether it was
the Union or the Associated Oil. Helm was in con-
sultation with me at Batavia only a few minutes.
He said it might be necessary to ask me to go to San
Francisco, and he wanted to know if I would go. It
was to appear as a witness in certain litigation then
pending. This was about September, 1916.

Q. Have you given us all the conversation that
occurred ? A. Why, no, but I will answer any ques-
tion regarding it. Q. Well, I want you to be frank
with me. I want to know what [208 — 101] this

236 The United States of America vs.

(Deposition of Charles W. Gardiner.)
conversation was. Give me this conversation. Go on
and give it all to me. A. As I understood it, there
was some question as to the title to certain lands, and
he wanted to see me and see that I was alive and
wanted to know if I was one of the locators, and
wanted to know if I would go out and appear in this
certain litigation. Now, I think that was the purport
of what was said. Q. Is that all of the substance of
the conversation ? A. That wras the idea I have given
you. Q. Was there any arrangement made at that
time or at any subsequent time as to compensation
for your going there'? A. Yes. Q. What arrange-
ment and when was it made? A. I don't know as
to that. Mr. Searls wired me and I went.

There had consultation with Helm and Attorney
Oscar Lawler. Did not appear as a witness then in
any suit affecting any of the lands upon which I was
a locator. No, I have not brought any action
against L. B. McMurtry on account of the trans-
actions growing out of this power of attorney dated
December, 1907. Q. Do you contemplate any such
action ? A. Not now.

No, never received money or anything of value by
reason of signing this power of attorney in December,
1911, since surrendering certificate No. 30. [209 —
102]

Cross-examination.

Yes, before being interviewed by Helm, had been
interviewed by a Government agent concerning
these locations. Was not asked to sign a statement
and do not remember wThat he told me. I remem-

California Midway Oil Company et ah 237

(Deposition of Charles W. Gardiner.)

ber very little about it, except that he called.

Q. At the time you entered into that contract of
attorneyship, that is, making Mr. McMurtry your
attorney in fact, had you ever told him, or anyone
for him, that you would permit him to use your
name to locate the lands for his benefit in Cali-
fornia or elsewhere ? A. No, sir. Q. The power of
attorney granted by you to Mr. McMurtry was
recorded in the public records of Kern County, Cali-
fornia, in Book 10, at page 13, as is evidenced by
the certificate of the County Recorder of that
county, upon a certified copy handed me by Govern-
ment's counsel at this time, and it appears that it
was recorded —

Mr. ACH.— When, Mr. Hall?

Mr. HALL. — Is not the certificate on there?

Mr. ACH. — The certificate is on there; oh, yes.
Q. On the 5th day of January, 1909, and it also
appears that this power of attorney was recorded
in San Benito County, California, in Volume II, of
Miscellaneous Records, on April 13, 1908; prior to
the last date which was January 5, 1909, had Mr.
McMurtry or Mr. Searls or anybody asked you to
give them a writing, acknowledging that whatever
act that was done, by virtue of the power of attor-
ney which you gave them relative to locating lands,
should be, intended to be, for and on behalf of any-
body else? A. No, sir. Q. Did Mr. McMurtry or
Mr. Searls at any time advise you after January 1,
1909, at any time prior to your receiving the stock
in the Pacific Oil Lands Company, that they wanted

238 The United States of America vs.

(Deposition of Charles W. Gardiner.)
from you a secret or any transfer [210 — 103]
of your interest in any locations that were made in
your name in California'? A. No, sir. Q. Was
there ever any statement made to you by Searls,
McMurtry or anybody else in behalf of McMurtry,
or any other living person to the effect that they
desired you to guard their interests, if any they had,
in any locations made in your name in the event
of your death ? A. No, sir. Q. Did Mr. McMurtry
or Mr. Searls, or anybody, at any time or at any
place, in writing or verbally, make a request or a
suggestion to you that you should not transfer
any part of your or all of your interest in any loca-
tions that were made in your name to anybody else ?
A. No, sir. Q. Did you at any time yourself as-
sign or transfer any interest in any location made
in your name to anybody else? A. Except as set
forth in that stock certificate. Q. I am not talking
about the stock certificate. I am talking about
transferring, about a transfer, conveyance or assign-
ment of any part of your interest in any locations
made for you by McMurtry? A. No, sir. Q. Did
you ever execute any contract to the effect that you
would assign, upon the happening of any contin-
gency, any interest in any location that was made in
your name by Mr. McMurtry, under this power of
attorney? A. No, sir. Q. I show you the exhibit
which Mr. Hall caused to be marked Government's
Exhibit 7, which is a ratification of the power of
attorney of December 21, and ratification of con-
tract made on your behalf by McMurtry with W. P.

California Midway Oil Company et al. 239

(Deposition of Charles W. Gardiner.)
Herrin, to which your signature is appended, and
I ask you did you at any time prior to the execu-
tion of that ratification, sign any document of any
kind or character yourself affecting any location
which was made in your name by Mr. McMurtry?
A. No, sir. Q. Did you ever have any conversation
with Mr. McMurtry to the effect that he would be
entitled to any of the lands that he located in your
[211 — 104] name or to any interest in any of these
lands in the event that he should locate any? A.
No, sir. Q. Did you with Mr. Searls? A. No, sir.
Between the time I signed the power of attorney
and the disposed of the stock to Searls, did not
meet or talk with McMurtry. He was not present
to my knowledge when I signed the power of at-
torney. Neither McMurtry nor anyone for him,
between the time of signing this power of attorney
and the time I sold to Searls the stock asked me to
recognize that McMurtry had any interest in the
lands that were located or were to be located in my
name.

Q. At the time you put your signature to the
original power of attorney, did you have any in-
tention of defrauding the Government of the United
States'? A. No, sir. Yes, it was my intention that
McMurtry should make locations of oil lands in
California, if he found any, by virtue of that power
of attorney. When Searls asked me to sign this
power of attorney he explained to me McMurtry 's
capabilities as an oil developer, and suggested that
I become a locator in the premises, that he had con-

240 The United States of America vs.

(Deposition of Charles W. Gardiner.)
fidence in him. Yes, he said he was to become a
locator. I then understood that it took eight per-
sons to locate a quarter section of land, or 1G0 acres.
Cannot say that I then knew that the laws author-
ized every person to locate 20 acres for placer min-
ing.

Q. Are you acquainted with any of the persons
whose names I will now call off to you: Frank D.
Taylor, Edwin L. Powell, J. P. Harder, S. H. Free-
man. A. Yes. Do you mean I know them now or
then? Q. Did you know them at the time that
you signed the power of attorney? A. Go ahead.
A. D. W. Darling, J W. Pentz. A. Yes. Q. C.
W. Thorn? A. Yes, sir. Q. Herbert [212—105]
Walker, W. A. Keenan, H. E. Bashore, C. Rupert
Walker, R. P. Welch, Eugene Metz, F. H. Romaine,
Jr., William Mahr, Samuel R. Banks, Frank B.
Chapman, Julian P. W. Richmond, Fred S. Thorn,
Harry B. Thorn, George W. Berry? A. Yes, I
think that is his name. Q. George A. Meinecke,
Francis E. Pratt, J. C. Thickens, William F. Christ-
man, Mark W. Hatch, Hamlin E, Hatch, F. R.
Bailey, Walter Wilson and J. E. Farrell. Now, the
only person you knew was F. H. Searls? A. Yes,
sir. Q. Now, did anybody tell you at any time that
either or any of the persons whose names I have
called off to you, or any persons that were inter-
ested in the locations made by Mr. McMurtry under
the powers of attorney obtained here in New York,
had transferred to him or any person of his selec-
tion, their interests in the lands which had been

California Midway Oil Company et al. 241

(Deposition of Charles W. Gardiner.)
located or in the locations themselves? A. No, sir.
Q. Was it ever suggested to you by anyone that
either or any of those persons, or any of your as-
sociated locators, or any of the locators, used by Mr.
McMurtry in the making of those locations had
understood or agreed to transfer to Mr. McMurtry
or any one of his selection, or to any corporation
or any of the locations or any of the lands or any
interest in any locations, or interest in any of the
lands, referred to by me in my question? A. No,
sir. Q. Was there ever any implied understanding
on your part that Mr. McMurtry was to have any in-
terest in any of the lands or in any of the locations
made in your name? A. No, sir. Q. Did any of
the individuals whose names I have called at any
time assert to you that they had made any convey-
ance to Mr. McMurtry or anyone of his selection
of their interest in the locations or in the lands, or
any part thereof? A. No, sir. Q. Did either or
any of those persons at any time assert to you, or
in your presence state that they had executed any
transfer to Mr. McMurtry, [213 — 106] or anyone
of his selection at any time as to their interest in
the locations or in the lands, or any part thereof.
A. No, sir. Q. Mr. Gardiner, I am representing the
Associated Oil Company, a corporation that through
its nominees, W. F. Herrin and others, purchased
from Mr. McMurtry, who represented himself to be
your agent, and the agent of several others, some
lands located by him, according to the records of
Kern County, in your name ; for those lands, to Mr.

242 The United States of America vs.

(Deposition of Charles W. Gardiner.)
McMurtry, my clients paid in excess, as I under-
stand the figures, of two millions of dollars. The
Government of the United States, through these pro-
ceedings, are seeking to recover those lands from
my clients, including the improvements my clients
made upon the land, and in addition thereto, the
value of all oil and gas taken from the land by my
clients, upon the theory, among other things, that
there was not a bona fide location of those lands,
and that the locators were "dummy" locators, and
that they had no substantial or real interest in the
lands, but that they permitted themselves to be used
for the purpose of enriching Mr. McMurtry, and
permitted him to gain a greater part of the public
domain than he as an individual was entitled to.
Are you such a dummy, or were you such a dummy
at that time? A. No, sir, I am not. Q. Before deal-
ing with Mr. McMurtry as agent of yourself and
these other colocators, it has appeared in evidence
in some cases, and will appear in this case, I take it,
that the Associated Oil Company [214 — 107] de-
sired to know whether or not powers of attorney
of the locators under which Mr. McMurtry was pro-
fessing to act, had been rescinded, or were in full
force and effect, or whether they had been modified,
and also desired that those locators should confirm
and ratify certain contracts which he, as agent of
those locators, including yourself, had made with
Mr. Herrin and others. The exhibit No. 7 you read
at the request of Mr. Hall, did you not (showing
witness) ? A. Yes. sir.

California Midway Oil Company et ah 243

(Deposition of Charles W. Gardiner.)

Q. Now, at the time of signing Government's Ex-
hibit 7, did you read it? A. Yes, sir. I went to
the office on Broadway, New York, about No. 248
or 290, where I found C. W. Thorn, who showed it
to me and requested my signature to it. Was not
told by Thorn or anybody at that time that I had no
interest in the contracts or in the locations.

Q. Did Mr. Thorn at that time undertake to tell
you in any way that he was a party to the contract
with Herrin, or had ever seen it or read it, or had
any copy of it in his possession, or anything of that
kind? A. No, sir. Q. Had you ever seen a [215 —
108] copy of the contract that was made by Mc-
Murtry as your agent with W. F. Herrin and
others? A. No, sir.

Nor had I seen the original or a copy of any
contract that had been made by McMurtry with
Herrin and other people on my behalf concerning
the locations made in California. Had not re-
ceived any money from McMurtry or anybody else
at the time Thorn gave me this paper to sign.

Q. I see upon this check dated May 6, 1911, tEe
endorsement of C. W. Thorn, which discloses the
fact that after you endorsed this check it found
its way into the hands of C. W. Thorn. Is it not
a fact that after you received this check that Mr.
Thorn proposed to sell you some Columbus Midway
stock and sold it to you, sold you 750 shares of
Columbus Midway stock, and that you paid him
$250 for it with that check? A. Yes, sir. Q. Did
Mr. Thorn tell you at that time what properties

244 The United States of America vs.

( Deposition of Charles W. Gardiner.)
the Columbus Midway Company claimed to own,
or tell you what the prospects were as to the success
of that company ? A. Mr. Thorn did not. Q. Who
did, if anybody? A. Mr. Searls. Q. Mr. Searls?
A. Yes, sir. Q. Was Mr. Searls here at that time?
A. He wras in the east at that time. Q. But the
transaction of buying the stock, did that occur with
you and Searls, or with you and Thorn? A. Be-
tween myself and Searls. Q. Do you know, then,
how the signature or endorsement of Thorn came
upon that certificate, or upon that check? A. I
presume Mr. Searls passed it over to Mr. Thorn.
Q. Do you know what position, if any, Mr. Thorn
had with the Columbus Midway Oil Company? A.
I understood he was selling stock for them. At the
time I signed that ratification of McMurtry 's I ex-
pected to get my proportional division of the pro-
ceeds, expecting him to be compensated for the
services. There was no [216 — 109] written agree-
ment, but it was understood "as much as I under-
stand it."

Q. You are quite positive that it was never under-
stood at any time, directly or indirectly, that he
was to receive any indirectly, that he was to receive
any interest in any of those lands, or any interest
in any of these locations ; is that a fact ? A. Not to
my knowledge. Q. You wTere never advised by Mr.
McMurtry, were you, or Mr. Searls, of the receipt
by Mr. McMurtry at the time that you signed this
ratification of that power of attorney of any sum
of money under those contracts, you were not told

California Midway Oil Company et ah 245

(Deposition of Charles W. Gardiner.)
at the time you signed this contract or ratification
that Mr. McMurtry had received any sum of money
from Mr. Herrin, or the Associated Oil Company
upon these contracts, had you? A. I don't remem-
ber. Q. Was Mr. Searls present at the time you
signed the ratification? A. No, sir. Q. Just you
and Mr. Thorn? A. No, sir; that was signed at
Batavia, the ratification. Q. The ratification was
signed at Batavia? A. I think so. Q. Well, then,
I misunderstood you. A. The original was signed
in New York City, the ratification was signed in
Batavia. Q. Yes. Now, how did you get this ratifi-
cation? A. It was mailed to me. Q. Then Mr.
Searls was not present? A. No, sir. Q. And you
don't remember what was in the letter. A. No, sir.
Q. Then at the time did the letter state, or attempt
to advise you that moneys had already been re-
ceived or had not been received, upon these con-
tracts, or that this thing was necessary because of
the possibility of enforcing such a contract, or of the
making of such a contract ; do you remember anything
about that? A. Why, I understood that the comple-
tion of the contract was pending the ratification of
the locators. Q. I see. Now, then, wyere you ever told
after that, or did you ever ascertain before you
went to [217 — 110] San Francisco, if you ascer-
tained it then, that Mr. McMurtry had been paid
a considerable sum of money upon these contracts
by the Associated Oil Company? A. I think that
is set forth in the printed reports. Q. And before
this printed report was made, have you any in-

_M(> The United States of America vs.

(Deposition of Charles W. Gardiner.)
formation to the effect that he had received any
considerable sum of money from this Associated
Oil Company'? A. I don't remember. When Searls
bought this stock from me, he appeared to be buy-
ing it for himself; I was not sure. I was satisfied
with his explanation and relied upon his statement
as to the probable trouble of getting any more out
of it. I believe he explained that the Government
had withdrawn these lands and was claiming them.
Q. Yes ; and is it not because of the fact that you
understood you would be involved in litigation and
that you did not know what it would cost you, or
what trouble it was, that you concluded you had
better take cash and quit? A. I did. Am not per-
sonally acquainted with Major E. A. Hoeppner. At
the time I received my stock in the Pacific Oil
Lands Company the only stock I knew anything
about having been issued was my own. McMurtry
did not consult me about the issue of the stock of
this company, and I knew nothing about his inten-
tions in that regard. Do not recall that Searls
spoke to me about the incorporation of this com-
pany or the issuance of the stock. I had no knowl-
edge as to what contracts or arrangements McMur-
try made with anybody after the locations were
made for the care, handling or preservation of the
interests of the locators in these lands. I under-
stood I had given him full right, power and author-
ity to make any contracts he wanted for the de-
velopment of any lands he located under the power
of attorney and I had full confidence in him [218 —

California Midway Oil Company et ah 247

(Deposition of Charles W. Gardiner.)
Ill] and understood that it was the net results
after expenditure or whatever money might be
necessary that I was interested in. I expected to
put up my share for the development, if the de-
velopment proved satisfactory, if it was successful,
if called upon.

Q. Yes, in other words, you mean if the lands
were located and they looked good, you expected to
put up your share to protect them; is that what
you mean? A. Yes, sir. No, no one insured me
against any expenditure, not that I know of. From
1908 to 1916, I lived at Batavia, and established my
address at Chicago in November last year. After
signing the power of attorney, saw Searls half a
dozen times perhaps at Batavia. I was not in New
York during that time. Have never been interested
in any other located lands in California or else-
where other than the lands located by McMurtry.

Redirect Examination.

Q. Did you ever learn that your name was used
by Mr. McMurtry in making locations under this
power of attorney in San Benito County, Cali-
fornia?

A. Yes, sir. Q. When did you learn that? A.
It is in that report. Q. Was that the first time you
had known of that? A. I think it must have been.
Don't know how many locations were made in my
name in San Benito County. Don't remember that
anyone ever told me.

Q. Do you know what became of your interest in
tEe San Benito County lands?

248 The United States of America vs.

(Deposition of Charles W. Gardiner.)

A. I believe they are still pending. Q. What
interests do you [219 — 112] now claim in those
San Benito County claims? A. Whatever interest
I had, Mr. McMurtry will fully protect me. Q.
What did Mr. Thorn say to you, if you can now
remember, when he presented the ratification for
your signature, Exhibit 7?

A. Mr. Thorn did not present it. Q. Who did
present it? A. It came by mail, if I remember
rightly. Q. I misunderstood you then when you
said that you talked to Thorn about the ratification
in some building here near the postoffice building
in New York City? A. You must have misunder-
stood me.

Q. Upon your cross-examination you said there
was a general understanding that McMurtry was to
be compensated. With whom did you have that
general understanding? A. Mr. Sear Is. Q. When
was it that you had that understanding with Mr,
Searls? A. I don't remember. Q. With reference
to the time you executed the power of attorney, when
was it? A. It was after that. Q. What did Mr.
Searls say to you about it? A. I cannot remember
what he said. I have set forth the purport of
what he did say in my testimony. Q. What did
you understand to be the compensation of Mr. Mc-
Murtry? A. It all depended upon circumstances.
Q. What circumstances ? A. The circumstances that
might arise in the development of the location. Q.
What circumstances do you refer to? A. Neces-
sarily there must have been numerous expenses in

California Midway Oil Company et al. 249

(Deposition of Charles W. Gardiner.)
furthering this location. I could not tell what they
were. Q. Were you ever called upon to put up
any money or means in [220 — 113] furthering
these locations? A. No. Q. On your cross-exam-
ination, in answer to Mr. Ach, you said you were
told that Mr. McMurtry was to finance the develop-
ment work. Who told you that, and when? A.
That was my general understanding in the begin-
ning. Q. Was that told to you before or after you
signed the power of attorney? A. My recollection
is both. Q. By whom. A. By Mr. Searls. Q. Did
you know at the time you signed the power of at-
torney how much you would have to put up for the
development and annual assessment work upon
each claim on which your name was used as a
locator? A. I don't remember. Q. Did you know
at that time what amount was required to be spent
annually upon each of these claims upon which you
were a locator? A. Not the exact amount; I knew
in a general way. Q. Where did you get your in-
formation about that? A. I cannot tell you that,
except that I know that they have to do a certain
amount of work on any mining claim, general in-
formation. Q. If your name was located on Jan-
uary 1, 1909, on sixty locations, were you at that
time prepared and willing to spend one-eighth of
six thousand dollars each year to carry on the de-
velopment work?

A. Yes. Q. At the time you signed the power of
attorney, did you understand and were you advised
that you might be obligated to put up the sum of

250 The United States of America vs.

(Deposition of Richard B. Welch.)
$750 each year for annual assessment or develop-
ment work on these claims'? A. I don't remember.
[221—114]

Deposition of Richard B. Welch, for Plaintiff.

RICHARD B. WELCH, called April 16, 1917, on
behalf of the plaintiff, testified by deposition as
follows :

I reside at West Haven, Connecticut. Clerk in
the West Haven Water Company since November,
1910. In December 1907, resided in West Haven ;
was time clerk.

Q. The records of Kern County, California, dis-
closes that there is therein recorded a power of at-
torney dated December 19, 1907 (substance of Ex-
hibit 4 read to witness), are you the R. B. Welch
who executed that instrument?

A. I signed several papers. I suppose I signed
that.

Don't remember who requested me to sign it
unless it was mv brother-in-law, John B. Thickens.

Q. Did you have any conversaction with Mr. John
B. Thickens about signing this power of attorney.

A. Not that I remember.

Q. Well, what, if anything, was said to you prior
to the time you signed the power attorney, by Mr.
Thickens? A. I cannot recall.

Q. Where were you when you signed it?

A. I cannot recall that.

Q. Were you in the city of New York?

A. I cannot say. ,Jj

California Midway Oil Company et al. 251

(Deposition of Richard B. Welch.)

Q. Did you appear before a notary public when
you signed it ? A. I cannot say that.

Q Why did you sign it?

A. I cannot recall why I signed it.

Q. You cannot recall that you did sign it ?

A. I suppose that I did; I signed several papers,
but I cannot recall that I signed this particular one.

Q. Why did you sign any papers in respect to this
matter ?

A. Why, I trusted to my brother-in-law and
signed whatever he asked me to sign.

Q. What purpose did you have in mind when you
signed these papers? A. Why, I don't know.

Q. Were you familiar with the laws of the United
States at that time governing the location or the
making of placer mining claims upon the [222 —
115] public domain of the United States?

A. I was not.

Q. At the time you signed this power of attorney,
what was your intention with respect to exercising
your rights under the laws of the United States, in
taking up or locating upon the public domain?

A. I suppose I was locating a claim and that some
day it would be worth some money.

Q. Where did you get any information which en-
gendered that supposition in you?

A. From Mr. Thickens, I suppose, if I got any.

Q. When is the first incident with respect to this
transaction that you can now definitely recall to
mind?

A. You mean — will you repeat that question?

252 The United States of America vs.

(Deposition of Richard B. Welch.)

Q. Do you know at this time how many claims you
were located upon by reason of having signed this
power of attorney? A. I do not.

Q. Did you ever know how many claims you were
located upon? A. No, sir.

Q. Did you ever sign any papers that you can re-
member of in connection with these mining land
transactions ?

A. Some ratification papers, I believe, came to me
and I signed them.

Q. Do you know what became of the power of at-
torney which you signed ? A. I do not.

Q. Do you know what your attorney in fact, L. B.
McMurtry, did under that power of attorney?

A. I do not.

Q. Were you ever asked to advance any money or
means in the development of any mining claims on
which your name was used as a locator ?

A. I was not.

Q. At the time you signed the power of attorney,
did you have any intention of advancing any money
to be used in the development of or discovery of oil
or other minerals upon any lands which might be
located by the use of your name?

A. Why, if Mr. Thickens had said it was neces-
sary for me to advance some money, I suppose I
would.

Q. Did he ever say it was necessary for you to ad-
vance some money? A Not to my knowledge.

(Plaintiff's Exhibit with the deposition read in.
It is a ratification similar in form to Plantiff 's Ex-

California Midway Oil Company et al. 253

(Deposition of Richard B. Welch.)
hibit 1 with the deposition of Frank B. Chapman
and purports to have been executed by R. B. Welsh,
August 19, 1910.) [223—116]

Q. I invite your attention, Mr. Welch, to a paper
which has been marked Government's Exhibit 8;
whose signature is that on there, the signature of R.
B. Welch ? A. That is my signature. Q. When did
you sign that? A. Unless I was looking right at
it, I should say on the 19th of August. Q. How did
you come to sign that paper ? A. I cannot tell you.
Q. Do you know who presented it to you? A. I do
not. Q. Can you, after reading Exhibit 8 recall now
and relate to us the circumstances under which you
signed that paper? A. I cannot. Q. Do you know
how it came into your possession? A. I do not.
Q. Do you know the stenographer or rather the No-
tary Carroll H. Brooks? A. Yes, sir. Where did
he reside? A. I think he is in New Haven. Q. Do
you remember of having gone before him and ex-
ecuting that paper? A. Yes, sir. Q. Was anyone
with you when you executed that paper? A. I be-
lieve not. Q. Why did you execute that paper?
A. It was sent to me by someone, and I suppose it
was proper to sign it Q. At the time you signed it,
did you read it? A. I should say so. Q. Did you
know what it meant at that time ? A. I should think
I did. Q. Did you make any inquiry of anyone as
to this contract between L. B. McMurtry and W. P.
Herrin and others, of date August 4, 1910? A. I
did not. Q. Did you ever, or had you seen that con-
tract of August 4, at the time that you signed this

254 The United States of America vs.

(Deposition of Richard B. Welch.)
paper? A. I had not. Q. Had you ever seen it?
A No, sir. Q. At that time did you have any in-
formation whatever in regard to this contract of
August 4th? A. Not that I can recall. Q. At the
time you signed this ratification, did you know how
many locations your name had been used in making ?
A. I did not. Q. Did you know at that time whether
or not any public oil lands had been located by the
use of your name? A. I suppose there had been.
Q. Did you know where those lands were situated?
A. I did not. Q. Did you know any thing about the
state of development of those lands at that time?
A. I cannot recall whether I did or not. Q. At the
time you received [224 — 117] this ratification and
executed it, was there any demand made upon you to
advance any money or means to be employed in the
development of any oil lands. A. Not that I recall.
Q. Did you receive any compensation, money or any-
thing of value for executing this paper? A. Not
that I know of. Q. After the execution of the rati-
fication, Exhibit 8 of this date, when [225—118]
was the next time that you heard anything in regard
to this oil land transaction? A. I cannot say defin-
itely. Q. Did you have any conversation with Mr.
McMurtry in regard to it? A. I did not. Q. Did
you ever hear again from these oil land transactions
after you executed the ratification? A. Why, I
should say that I — from the company, you say?
Q. Well, from anyone in regard to these transac-
tions ? A. In regard to that paper ? Q. Well, yes,
in regard to this paper, or in regard to any oil lands

California Midway Oil Company et ah 255

(Deposition of Richard B. Welch.)
that had been located, or any transactions in regard
to any oil lands that had been located, by the use of
your name? A. Well, I heard I had other papers,
but I cannot tell what they were. Q. I invite your
attention to a check No. 163, dated, New York, Sep-
tember 11, 1911, drawn on the Second National Bank
of the City of New York, made payable to the order
of R. B. Welch, in the sum of $250, signed F. H.
Searls on the face, and on the back of the check ap-
pears the following in typewritting : " Received
from L. B. McMurtry, $250 in full payment for all
my right, title and interest in and to all lands located
by said L. B. McMurtry on my behalf, in Kern
County, California, pursuant to a power of attorney
made by myself and others to said L. B. McMurtry,
bearing date the 19th day of December, 1907."

Right underneath that typewriting which I have
just read appears the name, "R. B. Welch," "C. W.
Thorn, ' ' and then the name of " P. H. Searls. ' ' Did
you ever see that check before (showing witness) ?
A. Yes, sir. Q. When did you see it ? A. I cannot
give you the date. Q. How was it presented to you?
A. I do not recall. Q. Do you know the person who
presented it, or was it presented by mail? A. I
think that came by mail. Q. Was there a letter ac-
companying it ? A. That I cannot say.

That is my signature on the back of this check.
As I [226—119] recall, I sent it to John B.
Thickens.

Q. Why did you do that? A. Well, I suppose,
I should say it came from him in a letter. Q. Well,

256 The United States of America vs.

(Deposition of Richard B. Welch.)

did you get any cash on that check? A. I did not.

I do not recall that I received any money or thing
of value for endorsing that check. Should say I
read the typewriting on the back before I signed it.
Cannot recall the next transaction or occurrence
after signing this check.

Q. I invite your attention to Certificate No. 12,
certificate of stock No. 12 of the Pacific Oil Lands
Company, which is in the original book, or the stock
certificate book of the Pacific Oil Lands Company,
as produced by Mr. Brann here, which recites on its
face that there was issued to R. B. Welch, and that
R. B. Welch is the owner of 1000 shares of the
capital stock of the Pacific Oil Lands Company.
Do you know whether or not you ever received that
certificate ? A. I think I did. Q. Well, when was
it that you received it? A. I cannot give you the
date. Q. From whom did you receive it? A. I
think that was — I cannot tell for sure — but I think
that was received from Mr. Thorn. Q. Which Mr.
Thorn? A. I cannot tell you that. Q. Was he an
older gentleman or a younger man? A. An older
gentleman. Q. To refresh your memory, was that
Mr. C. W. Thorn, or Mr. Frederick Thorn. A. I
should say C. W. Q. Was the certificate handed to
you personally, or transmitted by mail ? A. I think
it came by mail. Q. Was there any letter accom-
panying it? A. Possibly there was. Q. Do you
know where that letter is now ? A. I have some let-
ters. Q. Where are they? A. At home.

Q. Do you remember the contents of that letter?

California Midway Oil Company et at 251

(Deposition of Richard B. Welch.)
A. I do not [227—120] Q. Do yon know why this
certificate of stock in the Pacific Oil Lands Company
was sent to you? A. I should say for a check that
I signed? A. I suppose so. Q. How long did you
keep this certificate of stock No. 12? A. That I
cannot say. Q. I notice attached to the stub of this
certificate in the original book a receipt which reads
as follows:

" Received certificate No. 12 for 1000 shares
of Pacific Oil Lands Company, dated Septem-
ber 14, 1911. R. B. Welch."
Is that your signature on that (showing witness) ?
A. Yes, sir, that is my signature on that. Q. Do
you remember when you signed that receipt I have
just read? A. I do not. Q. Do you know what
you did with it after you signed it? A. I do not.
Q. On the back of the certificate No. 12 I find the

following: "For value received hereby sell,

assign, and transfer unto Walter S. Brann

shares of the capital stock represented by the within
certificate, and do hereby irrevocably constitute and
appoint Walter S. Brann to transfer said stock on
the books of the within named corporation, with full
power of substitution in the premises." Dated
March 16, 1914, and it is signed "R. B. Welch, in
the presence of Clarence D. Horton." Is that your
signature to that (showing witness) ? A. Yes, sir.
Q. Who was Mr. Horton; did you know him? A.
Yes, sir. Q. Who was he? A. He is in the office
with me. Q. What did you do with this certificate
of stock after you signed it ? A. That I cannot tell.

258 The United States of America vs.

(Deposition of Richard B. Welch.)
Q. What did you receive, if [228—121] any-
thing, when you signed this transfer of the certifi-
cate of stock? A. I cannot tell you that. Q. Did
you receive any money at all? A. I do not remem-
ber. Q. On the back of it this purports to have
been signed March 16, 1914; do you know whether
or not that is the correct date on which you signed
it? A. I should say so. Q. HowT long before you
had signed it had you received this certificate? A.
I don't remember. Q. At the time you signed the
certificate, do you know how many claims had been
located on the public domain in the State of Cali-
fornia under the placer mining laws, upon which
your name appears as a locator? A. I never knew.
Q. Did you know at that time what interest you
had, if any, in any oil claims that had been located
by the use of your name? A. No. Q. The records
of Kern County, California, show that on January
1, 1909, there were made the following placer min-
ing locations on wrhich the name E. B. Welch ap-
pears, together with the names of seven other per-
sons, as locators, the claims being:

" Indiana," covering the northwest quarter of sec-
tion 34;

"Maine," covering the northwest quarter of sec-
tion 20;

"Ehode Island," covering the northwest quarter
of sec. 22 ;

"Pennsylvania," covering the northwest quarter
of sec. 26;

"Montana," covering the northwest quarter of

California Midway Oil Company el al. 259

(Deposition of Richard B. Welch.)
section 32; all these being in township 31 south,
range 23 east, and 19 other claims in Kern County,
California, located at the same time.

Have you ever claimed any interest in any of the
lands embraced in those locations? A. No, sir. Q.
Do you now claim any interest in them? A. No.
[229—122]

Cross-examination.

Married Mr. Thorn's sister June 16, 1906. Was
then in the ticket office of the Boston & Albany
Railroad, at Pittsfield, Massachusetts.

Q. In all of this matter concerning these oil land
transactions you relied entirely upon what Mr.
Thickens suggested to you, didn't you? A. Abso-
lutely. Q. It is not true that Mr. Thickens applied
to you to sign the power of attorney, and told you
it was to locate lands in California, and that you
might make a lot of money out of it? A. I should
presume he told me that. Q. I notice you "pre-
sume" and "I think" a great deal in making your
answers. Let me understand you. You now know
that you signed a power of attorney and you signed
a check and a ratification. Do you know that you
got a check for $20, too, besides that? A. I should
say that I did. Q. Up to the time of my asking
you about it, had you entirely forgotten it? A. I
had. Q. You had not mentioned it to Mr. Hall at
all. Now, I show you a check dated January 8,
1914, bearing upon the back of it the signature
"R. B. Welch"; is that your handwriting (showing
witness) ? A. That is. Q. Now, how did you get

260 The United States of America vs.

(Deposition of Richard B. Welch.)
that check, do you remember? A. I think there
was a letter that came from the Pacific Oil Lands
Company, as I remember, and said that it was some
distribution, and that was my share.

Mr. ACH. — Now, this check I offer in evidence,
No. 1178. Q. Now, up to that time, up to the time
of my interrogating [230 — 123] you about that,
you had forgotten entirely that you had received a
distribution by mail from the Pacific Oil Lands
Company; is that true? Do you understand my
question, after hesitation? A. I cannot understand
quite about it, Q. Is it true that up to the time I
showed you this check, this $20 check, with your
signature on it, and w7hile Mr. Hall was interrogat-
ing you, asking questions, that you forgot all about
the Pacific Oil Lands Company, about their having
sent you this check for $20 distribution? A. Why,
I had forgotten it in here, but I had known about it
before. Q. Before? A. Yes, sir. Q. You are a
little bit nervous, are you ? A. I am apt to be, I am
sorry to say, yes. Q. Do you remember now sign-
ing any other papers at any time in this matter, or
this transaction, besides the power of attorney, the
ratification, and these two checks that have been
shown to you? A. There was another paper at-
tached to that check, which I signed, but I cannot
remember all the papers I did sign. Q. You
don't remember? A. No. Q. You don't remember
whether that was a power of attorney or another
location or acknowledgment of location, or anything
of that kind, do you? A. I cannot tell you. Q.

California Midway Oil Company et al. 261

(Deposition of Richard B. Welch.)
You don't know whether that was a consent to the
formation of a corporation to hold these locations or
not, do you? A. I cannot tell you. Q. You don't
know anything about it? A. No, sir. Q. Now, I
show you a piece of paper dated New Haven,
August 14, 1913, and there seems to be a signature,
R. B. Welch, [231—124] there. Look at it.
Can you say whether C. W. Thorn witnessed your
signature, if that is your signature, — is that your
signature (showing witness) ? A. Yes, that is my
signature. Q. Do you know the notary public
whose name is appended to that paper as having
taken your acknowledgment? A. I did know him.
Q. What is his name? A. Mr. Daggett. Q. Did
you take it over to the Notary? A. Yes, sir. Q.
Was Mr. Thorn over there in Newr Haven when you
signed that paper? A. He wTas. Q. And you did
talk with Mr. Thorn about it at that time? A.
I should say I did. Q. And Mr. J. B. Thickens was
not there at that time? A. He was not. Q. And
when you signed that paper, did you give it back to
Mr. Thorn, or did you mail it to San Francisco?
A. I cannot tell you. Q. You cannot tell me? A.
No, sir. Q. Well, now, read it, please? A. (Wit-
ness reads paper as requested.) Q. Have you read
it? A. I have. Q. Do you now remember ever
reading it before ? A. I should say I did. Q. You
will notice that that paper wThich you signed in
August, 1913, gave Mr. McMurtry authority to ap-
pear at a stockholders' meeting of the Pacific Oil
Lands Company, and to vote your stock; do you

262 The United States of America vs.

(Deposition of Bichard B. Welch.)
now remember that? A. Yes, sir. Q. Now then,
you then knew that you had stock in that company,
didn't you? A. I should say I did. Q. Didn't you
also know that Mr. McMurtry had been your agent
for the purpose of locating oil lands — and for other
people — in California, before that? A. I should
say so. Q. Are you friendly with your brother-in-
law, J. B. Thickens? A. Yes, sir. Q. Did you see
him frequently after you signed the power of attor-
ney ? A. That I could not say. Q. Don't you know7
howT often you have seen your brother-in-law in the
last ten years ? A. No, I cannot tell you how many
times. Q. No, but I want to know if you have seen
him often ? A. Not often, no. Q. Did he ever visit
your house over there, or your home, in New
Haven? A. He [232—125] has visited once. Q.
Did you ever go over there to visit him, wherever he
lives? A. Yes, sir. Q. When did you do it, in
1913? A. I cannot tell you. Q. Well, now, refer-
ring to this check wThich Mr. Hall had there a min-
ute ago, made payable to you for $250, let me see
whether I can refresh your memory in any way
about it. Is it not true that Mr. Thorn brought you
this check for $250 and at the same time called your
attention to the fact that he wras interested in some
oil lands, or an oil company knowTn as the Columbus
Midway Oil Company, and suggested to you that it
might be a good thing for you to buy 750 shares of
this company's stock for $250 — wTith that check —
and didn't you get a certificate of stock in the Co-
lumbus Midway Company for 750 shares ? A. I got

California Midway Oil Company ct al. 263

(Deposition of Richard B. Welch.)
a certificate for 750 shares of the Columbus Midway
Oil Company. Q. And didn't you give him that
check, after endorsing your name on it, in payment
of that stock? A. I cannot tell you how I got the
certificate. Q. What did you afterward do with
that certificate for 750 shares of the Columbus Mid-
way Oil Company's stock, didn't you afterward
give it back to Mr. Thorn at the same time you gave
him the stock in the Pacific Oil Lands Company?
A. I gave the two certificates at the same time. Q.
To Mr. Thorn? A. I cannot remember who I gave
them to. Q. Is it not true in addition to that, when
you gave up those two certificates, that you got $500
in money? A. I did. Q. And you had forgotten
that when Mr. Hall asked you? A. I did not
understand the question, the proposition. Q. You
did get $500? A. I did. Q. Who gave it to you?
A. I cannot tell you. Q. Well, at what place were
you wThen you were given that $500 in money, Con-
necticut? A. In West Haven, I should say. Q.
West Haven? A. Yes, sir. Q. What year was
that, was it at the time you signed the back of that
transfer in the stock book, in 1914? A. I cannot
tell you. [233 — 126] Q. You cannot remember at
all? A. No, sir. Q. Can you remember what was
said to you at that time about it, why anybody was
giving you $500? A. I suppose — Q. Can you re-
member what the party said who gave you the $500 ?
A. No, I cannot. Q. You cannot remember? A.
No, sir. Q. Do you remember anybody stating to
you that the oil lands you were interested in, were

2()4 The United States of America vs.

(Deposition of Kichard B. Welch.)
involved in litigation, that the Government was try-
ing to take them away, and here was your chance to
get through with the thing for $500, or to take
chances on the results; do you remember that being
said to you by anybody ? A. No, sir. Q. Have you
ever been on the stand before in any case? A. No,
not to my knowledge. Q. Have you a bad memory
as a rule? A. Why, I cannot say as to that. Q.
What? A. I don't know what you would call a bad
memory. Q. Did you ever receive any other papers
from the Oil Land Company in California that you
remember of ? A. I received my notification of the
meeting. Q. Yes. A. And some paper that shows
the condition of the Company. Q. Where is that?
A. That is in West Haven.

Mr. ACH. — I offer in evidence this paper dated
August 14, 1913, signed by the witness Welch, and
witnessed in the presence of C. W. Thorn, and ac-
knowledged before David Daggett, Notary Public,
New Haven County, Connecticut.

(Defendants Exhibit UA" is similar in form to
Plaintiff's Exhibit 5 with deposition of Frank B.
Chapman.)

Q. I now show you a piece of paper comprising
three sheets of typewriting, entitled " Pacific Oil
Lands Company, First Report to Stockholders,"
dated January, 1914, in pencil, and in the upper
left-hand corner the initials, "H. A." and "F. H."
Kindly look at that paper and tell me whether you
did not get that paper, or a copy of that paper with
the $20 check. Read it over and take your time,

California Mid waif Oil Company et ah 265

(Deposition of Richard B. Welch.)
unless you recognize it without reading it over
(showing [234 — 127] witness). A. I should say
I received that paper, a paper like that. Q. Now,
Mr. Welch, have you been ill? A. No. Q. Your
health good? A. Yes, sir. Q. You have not been
ill at all? A. No, sir. Q. At any time? A. No,
sir. Q. Been at work all the time steadily? A.
Yes, sir. Q. This paper which you say you re-
ceived with that $20 check — when you got this $20
check which I showed you there and you endorsed
it, what did you do with it, did you cash it, or don't
you remember? A. I don't remember. Q. You
don't remember what you did with the money? A.
No, sir. Q. Don't you remember what you did with
the $500 Mr. Thorn gave you in money? A. Yes,
sir. Q. Were you ever asked before by anybody
what you did with the money? A. What money?
Q. The $500. A. No, sir, not that I know of. Q.
What? A. Not that I know of. Q. Did your wife
ever get any part of it? A. Yes, sir. Q. What
part of it did she get? A. She got it all. Q. Did
you give her the $20 too? A. I may have. Q. Did
you give her the shares of stock when you got those,
too, did she take care of that for you, too? A. I
cannot say. Q. When you gave Mr. Thorn that
stock over in New Haven, or wherever you wTere, the
two certificates, one of the Columbus and one of the
other company, you got the $500, didn't you? A. I
cannot say wThen I got that $500. Q. Didn't you get
it when you gave up the stock to him ? A. I cannot
say that. Q. Do you know where you were when

266 The United States of America vs.

(Deposition of Richard B. Welch.)
you got the money. A. I should say that I was in
West Haven. Q. Was it in currency or gold? A.
I should say it was a check. Q. What did you do
with the check, give it to your wife? A. I don't
know. Q. Or did somebody cash it for you, over
there? A. I think it was cashed — I would not say
cash — it was probably deposited. Q. In your
name ? A. In my name, yes, sir. Q. In the bank ?
A. In the bank. Q. Have you got a bank account
now? A. Yes, sir. Q. How [235—128] about the
$20 check, wThere did that go to ? A. I should say it
went in the same place. Q. Well, you understood
wThen you got these moneys that it was because of
your interest in these located lands out in Cali-
fornia? A. I should say so. Q. You knew then
that you had a claim then to some lands out in Cali-
fornia? A. Yes, sir. Q. Now, in this report that
you say you received when you got these checks, this
$20 check, it wTas stated that Mr. McMurtry, as a
last resort and fortunately, had made arrangements
with the Associated Oil Campany, by which the
Pacific Oil Lands Company, or rather by which the
Associated Oil Company agreed to take over 1440
acres of land and to do all the work necessary to
preserve the title to the land, and to pay McMurtry
out of the oil produced from the land, if any, twenty
cents per barrel. Now, as I read that to you, you
having read it a little while ago in the presence of
Mr. Hall and myself and the reporter, and others,
other persons present, and having read it when you
got it, do you now remember that you were in-

California Midway Oil Company et al. 267

(Deposition of Richard B. Welch.)

formed in that paper that he had transferred to the

Associated Oil Company 1,440 acres of land, and
that the Associated Oil Company agreed to do all
the work necessary in order to preserve the title to
the land and pay out of the oil produced from the
land, twenty cents per barrel, if they got any oil?
A. I remember that; yes. Q. Didn't yon under-
stand at that time that that was referring to land
which Mr. McMnrtry had located in part in your
name under the power of attorney that you had
given at the request of Mr. Thickens, didn't you
understand that? A. I don't know that I gave it
any thought. Q. When you gave the power of at-
torney to Mr. Thickens, it is true, is it not, that he
told you that this man, Mr. McMurtry, knew about
oil lands in California? A. Yes, sir. Q. Is that
so? A. Yes, sir. Q. And it is also true, is it not,
that he told you at that time that Mr. [236—129]
McMurtry as getting a number of people together,
and he was helping to get a number of people to-
gether to locate oil lands in California for these peo-
ple, if he should find any oil lands ; is that not true ?
A. I cannot just remember what was said to me.
Q. I am not asking you to remember just what was
said to you, but did not Mr. Thickens imply to you
that he wTas getting some people to locate lands in
California? A. He did. Q. And didn't he say to
you substantially — what is your name, Richard or
Ralph, or Rudolph? A. Richard. Q. Richard-
did he call you "Dick"? A. No. Q. Well, didn't
he say, "Here, Dick, here is a chance to become a

268 The United States of America vs.

(Deposition of Richard B. Welch.)
locator, and this man will locate in your name out
there and you will have a chance to make some
money out of it"? A. I got that impression. Q.
And you were not trying to commit a fraud on the
Government, were you? A. No, I was not. Q.
You were not trying to help Mr. Thickens or Mr.
McMurtry to perpetrate a fraud on the Govern-
ment, were you? A. No, sir. Q. Did you think
you wTere doing anything but what was your legal
right? A. No. Q. You did not think you were
going beyond your legal right, did you? A. No,
sir. Q. Didn't your brother-in-law tell you that
you had a right under the law to locate some land
belonging to the Government for oil, and if you
struck oil on it, you might make a big fortune out
of it? A. I cannot remember what he said. Q.
Didn't he say something about that to you? A.
What? Q. Something about a chance of striking
oil and making a lot of money out of it, and becom-
ing a sort of " Coal-Oil-Tommy" or something of
that kind? A. I cannot remember. Q. What? A.
I cannot remember. Q. Well, he told you, didn't
he, that he wanted you to sign this power for your
own benefit so as to give you a chance? A. I
should say so. Q. He didn't tell you to come and
sign a paper so as to give another fellow a chance,
did he? [237—130] A. No, sir. Q. He didn't
tell you that he wranted you to sign a paper so as to
give him, Thickens, a chance, did he? A. No, sir.
Q. And he didn't ask you to sign a paper so as to
give Mr. McMurtry a chance to make some money,

California Midway Oil Company et ah 269

(Deposition of Richard B. Welch.)
did he? A. I should say not. Q. Now, in reading
this paper over further, I see here that he stated
that the making of this contract with the associated
was the only thing to do to save what wTe now have;
that there were many people whom Mr. McMurtry
felt should be beneficiaries of this agreement which
he had made; that there were the locators; that
there were the people who had given money to aid
in carrying on the work of holding the lands until
they were sold; there wTere those wTho had worked
and watched night and day to see that hostile par-
ties had not jumped the lands and taken them
away ; there were men who had labored on the lands
doing assessment work; and finally there was Mr.
McMurtry himself, and Mr. Hoeppner, the first of
whom had conceived and carried out the plan of
getting and holding the lands, and the latter of
whom had done yeoman's wTork in keeping off tres-
passers and jumpers. Do you now remember read-
ing that at that time? A. I remember; yes. Q.
And you did know that Mr. McMurtry had located
lands and had a lot of trouble in holding those lands
against fellows that were trying to take it away
from him, when you read that paper? A. I should
say I understand it that way. Q. You understand
it that way now as I read it ? A. Yes, sir. Q. And
you understand wThat the effect of those words are,
don't you? A. Yes, sir. Q. And you understand
from my reading that Mr. McMurtry had a lot of
trouble about these lands, and this company was
corresponding with you in January, 1914, when they

270 The United States of America vs.

(Deposition of Richard B. Welch.)
sent you some money as a dividend; is that not true?
A. I remember receiving the dividend. Q. Well
you remember now that they were telling you what
this dividend came from and why [238 — 131] you
were getting a dividend, don't you, in this report?
A. I should say so. Q. Now, this thing reads fur-
ther along as follows: "In order that all of these
people should share in this contract with the Asso-
ciated Oil Company, the Pacific Oil Lands Company
was formed August 11, 1911, and its stock was
divided up among the various people above named,
or provision made to reimburse such as were given
no stock." Now, as I read that, do you under-
stand it? A. I don't quite understand it, no. Q.
Well, I will read it again, and will read it very de-
liberately and slowly: "In order that all of these
people should share in this contract with the Asso-
ciated Oil Company, the Pacific Oil Lands Company
was formed in August, 1911, and its stock was
divided up among the various people above named,
or provision made to reimburse such as were given
no stock." Now, you understand when he says that
"all these people" he means the locators and the
men who helped them protect the lands, Mr. Mc-
Murtry doing his work, and Mr. Hoeppner, who had
done yeoman's service — the men had done the
assessment work — you remember my reading all
that a minute ago, don't you? A. Yes, sir. Q. Do
you understand it now? A. I think so. Q. Yes.
Now, he says: "In order that all these people should
share in this contract with the Associated Oil Com-

California Midway Oil Company et al. 271

(Deposition of RicHard B. Welch.)

pany" — you remember my reading about his Baying

that he had fortunately made a contrad with the
Associated Oil Company so that they would agree
to protect these 1440 acres; do you remember my
reading that I A. Yes, sir. [239—132]

Q. And you remember your reading it in this con-
tract a few minutes ago — not the contract — in this
report a few minutes ago when I asked you to read
the report here, just a few minutes ago ; can you re-
member reading it ? A. I cannot say that I read it
all; I just glanced at it. Q. Well, now, this paper
proceeds to say, in order that all of these people
should share in this contract with the Associated Oil
Company, this Pacific Oil Lands Company in which
you had stock was formed in August, 1911, and this
stock was divided among the people above named, or
provision was made to reimburse those who were
given no stock. To this company McMurtry trans-
ferred the contract with the Associated Oil Company,
or rather to the Associated — Mr. Hall. — With the
Associated? Mr. ACH.— Yes. Q. "Covering 1440
acres of land, and 640 acres of land in San Benito
County, and the stock of this company went to those
who had contributed in any way in getting and hold-
ing the land." Do you understand that language
as I read it to you? A. I think so. Q. Now, when
you looked at it a little while ago did you see that
provision in the report? A. I don't know that I
read it at all. Q. Yes. When you got it you read
it and you read everything that was in this, didn't
you ? A. I should say perhaps I did. Q. And you

272 The United States of America vs.

(Deposition of Richard B. Welch.)
understood it then, didn't you? A. I thought I
understood it. Q. Well, now, you understood then
from this paper that you were one of the locators;
that he had located these lands ; that he had made a
contract with the Associated Oil Company wThereby
they did all the wrork that the law required in order to
protect the lands ; that they had a lot of trouble about
the lands, keeping off jumpers; that Mr. Hoeppner
had helped a lot ; that the assessment work had been
done and that there had been prior locators ; that he
thought it was only fair and equitable [240 — 133]
that everybody should participate in that contract,
and therefore he organized this corporation and
divided the stock up of that corporation to these
various people, yourself included, as a locator.
Didn't you understand that? A. I should say so.
Q. And didn't you get a dividend right with that re-
port ? A. I got a dividend, but I don't know wThether
it was that one or not. Q. I understood you to say
that the report came with your check for $20.00 ; do
you remember that now? A. I can't remember wrhat
-came with the check. Q. I see. Now, see if I can-
not refresh your memory a little more. I am show-
ing you a paper now which reads like this:
"PACIFIC OIL LANDS COMPANY : I, the under-
signed, stockholder of the Pacific Oil Lands Com-
pany, a California corporation, with its principal
place of business in the City and County of San
Francisco, State of California, do hereby consent that
the Board of Directors of said corporation may set
aside $20,000 of the cash assets of said corporation

California Midway Oil Company et al, 273

(Deposition of Richard B. Welch.)
to be declared as a dividend upon the stock of said
corporation, and such other sums from time to time
as in their discretion may seem advisable; and I
hereby release the Board of Directors of said corpora-
tion from all liability of every kind and character
in so doing." Now, please look at it and see whether
that is your signature. A. That is my signature, yes,
sir. Q. Now, did you hear me read that paper to
you just now? A. Yes, sir. Q. Did you under-
stand it as I read it to you? The witness hesitates
and appears to be reading the paper again, and I ask
him again — I ask you again — did you read the paper
again yourself? A. I have not read it all, no. Q.
will you please go on and read it again yourself, and
say, "I am through,'' after you have read it. Read
it slowly, calmly and carefully, please. A. (Witness
leads paper as requested.) Q. Have you read it
now7 ? A. Yes, sir. <Q. Now, do you understand it ?
A. I think I do. [241—134]

Q. (Question read.) A. I cannot say that I did.
Q. Now, when you signed this power of attorney,
you did not give your brother-in-law or Mr. McMur-
try or anybody else any writing that they could use
your name to get lands from the United States Gov-
ernment for their benefit, did you? A. I don't
think I did.

Cannot remember signing any contract or agree-
ment to turn over any lands that were given me by
virtue of that power of attorney to McMurtry, Thick-
ens or anybody else ; nor can I remember anyone ask-
ing me to.

274 The United States of America vs.

(Deposition of Richard B. Welch.)

(Defendant's Exhibit "B" offered and read in evi-
dence and is similar in form to Plaintiff's Exhibit
6 with the deposition of Frank B. Chapman, and
dated December 12, 1913.)

Q. This writing that you got, the report from the
Pacific Oil Lands Company, when you got that divi-
dend, also said that they had changed the agreement
with the Associated Oil Company, and by the new
agreement the Associated Oil Company agreed to pay
to the Pacific Oil Lands Company, in which you held
this stock, $1,375,000, in cash, down, it says and the
balance in monthly installments of $20,000 a month.
Do you remember reading those big figures in this
report? A. Yes, sir. Q. What? A. Yes, sir. Q.
And do you [242 — 135] remember that it went on
and said: "This contract for the first time gave the
company an assured definite amount available, and
left only one opening by which future payments shall
be defeated. That is, if the Government shall take
away the land sold, that payments under the contract
stop from the date of such taking away, and there
is no further obligation on the part of the Associ-
ated Oil Company, to make any more payments."
Do you remember that now, that that was all under-
scored (showing witness) ? A. Yes, I see. Q. And
do you remember that Mr. McMurtry, or whoever
wrote this report, wTas calling the attention of the
stockholders of the company that they had received
this large sum of money on this contract, and there
was $20,000 of payments to come in every month, but
there was danger that the Government of the United

California Midway Oil Company et al. 275

(Deposition of Richard B. Welch.)

States might succeed in taking the land away from
everybody, and then the payments would slop. Now,
don't you remember thai now I A. I should say thai
I did. Q. And you knew when you read that, if the

Government or anyone should take that land away,
it was supposed to affect you and your rights, didn't
you? A. I should think I did. Q. This paper also
said, that is, this report of January, 1914, "In this
connection it is well to state that up to the presenl
time no title to any of the lands sold has been obtained
from the Government." Do you understand that
language, that no title to any of these lands that
were located and sold, by them to the Associated
Oil Company, had ever been gotten from the Gov-
ernment ; do you understand that? A. I don't think
so. Q. Did you understand it then? A. As I said,
I read the paper and I did not give it any thought.
Q. But you understood what you read? A. I think
so. Q. And you understand English? A. Yes, sir.
Q. And this paper was plain to you, you didn't have
to go and ask anybody what it meant, did you ? A.
No. Q. Did you ever read it over with your wife?
[243—136]

A. I don't remember. Q. Now, when the man
came with the $500 check is it not true that he told
you that there was some question being raised by the
Government about these lands, and that you could
have $500 in cash for your interest, or you could
hold your interest and take a gamble upon the out-
come of the claims of the Government; is that not
true? A. I cannot remember. Q. You won't testify

276 The United States of America vs.

(Deposition of Eichard B. Welch.)
that that did not occur, will you? A. I cannot re-
member whether it did or did not. Q. Did you have
any talk with your brother-in-law, Mr. Thickens,
about whether you should sell this stock or not, or
do you remember whether you did or that you did
not? A. I do not. Q. You may have and not re-
member it; is that the idea? A. I may have. Q.
Did you ever debate it — do you know the meaning of
the wrord "debate" — to debate it? A. Yes, sir. Q.
Did you ever debate it with your wife before selling
the stock for $500? A. I don't think I did. Q. Let
me ask you: Did you ever own any other stock in
any other corporation besides this in the Oil Lands
Company? A. No, sir. Q. Before you bought the
stock from Mr. Thorn in the Columbus Midway Com-
pany, with the first $250 you got out of these loca-
tions, did you advise with your brother-in-law, Mr.
Thickens, as to whether you should buy that stock or
not? A. No. Q. Did you rely entirely on Mr.
Thorn and what he said about your buying the stock ;
do you understand my question? A. I should say
that I did. Q. Did you at the time you bought the
stock in the Columbus Midway Company, from Mr.
Thorn, advise or consult with your wife as to whether
you should buy that stock or not? A. No, I did not.
Q. Did you act upon your own judgment in the
matter? A. I should say so. Q. Well, do you re-
member what hopes of enhancement in value of the
stock or advance in the value of the stock, or in mak-
ing money by buying the stock, that Mr. Thorn held
out to you, when he got that $250 check from you?

California Midway Oil Company et ah 277

(Deposition of Richard B. Welch.)
A. I do not. Q. He did tell you something, didn't
he? A. I don't know what he did tell me. [244—
137] Well, you were not making Thorn a present
of that $250, were you? A. I don't think I was.
Q. You thought you were getting something worth
as much as or more than $250, from what he said,
,is that true? A. I should think so. Q. You told
Mr. Hall, as I understood you, that you did not know
where the locations wTere made, which means that you
did not know where the land was which is mentioned
in this report, or in these proceedings that he has
been asking you about — NowT, it is true, is it not,
that you knewT these lands were in California. A. I
knew they were in California. Might have asked
Thickens about this matter after signing the power
of attorney. Should say that I required of him in
some way about it. I should say he told me that it
wTas being taken care of by Mr. McMurtry. Don't
remember that I advised Thickens as to whether I
should sign any of these papers. No, did not give
this $520 back to McMurtry or Thorn.

Redirect Examination.
This $500 which I received when I surrendered the
Pacific Oil Lands Company's certificate of stock and
the stock in the Columbus Midway Oil Company, and
the $20 dividend check is the only money or thing
of value that I received in connection with this en-
tire transaction. Am still unable to recall where I
signed the original power of attorney. Cannot re-
call having appeared before the Notary Public or
Commissioner of Deeds in the City of New York and

278 The United States of America vs.

(Deposition of Richard B. Welch.)
signing these papers. Cannot say where I was in
December, 1907. Cannot remember having been in
New York City during that month. [245—138]

Deposition of Julian P. W. Richmond, for Plaintiff.

JULIAN P. W. RICHMOND, a witness called
April 18, 1917, on behalf of the plaintiff, testified
by deposition as follows:

Am a civil engineer and reside at Yonkers, New
York. Am employed in New York City and have
been for over ten years. Was employed there in
December, 1907, as assistant engineer for the city.
as I am now. Never lived in or visited California ;
nor have I ever been engaged in actual mining.

Very likely I signed the power of attorney (Plain-
tiff's Exhibit 5), but I don't remember it distinctly.
Don't recall knowing John G. McTigue, Notary
Public, but remember having appeared before a
notary to execute an instrument. The connecting
link between myself and that document is a Mr.
C. W. Thorn, who was a comparatively old acquaint-
ance of mine; he was indebted to me for money
loans and other reasons, and interested me in this
location. Don't remember what he said. My im-
pression of his meaning was that by enabling me
to become a collector of such claim he could repay.
He made no direct reference that my participation
in this would be a benefit to him, and in that way
he could repay me; the inference was that he was
doing me a good turn, that he was leading me to
a profitable investment, I had heard of McMurtry

California Mid /raj/ Oil Company et ai. 279

(Deposition of Julian P. W. Richmond.)
on many occasions previous to this execution, to the
best of my recollection. Do not know that I met
Mr. McMurtry before executing the power of attor-
ney. Believe I was interested in a corporation with
which McMurtry and Thorn were connected. Don't
remember its name, but can guess. My best guess
or impression is that it was the Empire Oil Com-
pany. Don't remember that I had more than one
conversation with Thorn about executing this power
of attorney. Don't remember whose office I was
then in, but the place was at Fulton Street and
Broadway. There were present some other ac-
quaintances of Thorn, his son, I believe, and prob-
ably Mr. Freeman, and others whom I have forgot-
ten. [246 — 139] Don't recall what was said to me
at the time by either Mr. Thorn or the notary public
— nothing that made an impression upon me. After
signing it Mr. Thorn kept in touch with me at ir-
regular intervals concerning the transaction. In
a general way, he told me that the location of wells
was being prosecuted upon this property and that
the outlook was rosy for actual returns.

I don't remember that anything was said at the
time I signed as to any financial liability I would
incur. I cross-examined or questioned Mr. Thorn
regarding certain features of this power of attor-
ney. One of those was whether my giving the
power of attorney to anyone regarding my privi-
lege of locating mines or similar properties would
be estopped in regard to further locations. The
question was whether this particular document pre-

280 The United States of America vs.

(Deposition of Julian P. W. Richmond.)
eluded me from locating at other times, or in other
places; in other words, I wanted to know how much
this particular power of attorney bound me, and I
was told that it bound me, as near as I can recall,
only for the State of California, and I think it only
bound me for a term of years, and that was the
impression I received from Mr. Thorn. What I
assumed I knew was that if development should
take place, similar to all mining claims, that one
or more of the locators who established himself
upon the property, plotted it, surveyed it, recorded
a deed for it, and spending a certain amount of
labor and probably money upon it, within stated
periods, the regular routine, which I seemed to
always know of. Don't remember that anything
was said at the time I executed the power of attor-
ney or before as to what would be my liability, from
a financial standpoint, by reason of having executed
it.

(Plaintiff's Exhibit 9, which is a ratification simi-
lar in form to Plaintiff's Exhibit 1 with the depo-
sition of Prank B. Chapman, and purporting to
have been executed by Julian P. W. Richmond
August 16, 1910, offered in evidence.) [247—140]

To the best of my recollection this document
(Plaintiff's Exhibit 9) was executed by me at the
suggestion of Mr. Thorn. My recollection of events
at that time remains very vague. I would rather
not be pinned down to this document, and make my
answers regarding dealings with Mr. Thorn in gen-
eral. I signed it then because I had previously

California Midway Oil Company et ah 281

(Deposition of Julian P. W. Richmond.)
signed a power of attorney, and I understood that
this document was a ratification of the previous
power of attorney. Cot this understanding from
Mr. Thorn's statement and my interpretation of
this instrument (Exhibit 9). I certainly read it.
I cannot answer that question fully, as to whether
I was then advised as to the contents, purport and
effect of the contract made by L. B. McMurtry as
my attorney in fact, with W. F. Herrin and others,
dated August 4, 1910. Don't remember whether
this contract was exhibited to me at anv time. I
believe at the time I signed this paper (Exhibit 9)
I was a bona fide locator in the State of California
for some oil claims. It was my impression that my
power of attorney for locating claims was limited
by lawT to a single claim and that I had completely
exercised those powers in the original power of at-
torney executed to Mr. McMurtry. Q. At the time
you executed Exhibit No. 9, you had this under-
standing to which you refer in your last answer, did
you not? A. It was a mental understanding with
myself. Q. And you had it at the time you exe-
cuted Exhibit No. 9? A. I don't remember, I don't
remember. Q. At the time you executed Exhibit No.
9, the ratification, what did you understand was the
extent or area of mining claims? A. I don't re-
member any dimensions. I understand that those
claims are, are a matter, that the size of those
claims are regulated, and this was a standard claim.
Q. How many claims, if any, were you interested
in — wTere you claiming an interest in? A. At the

282 The United States of America vs.

(Deposition of Julian P. W. Richmond.)
time I executed — Q. Exhibit No. 9? A. I don't
remember. Q. Did you know at that [248 — 141]
time how many claims you claimed to be a locator
upon? A. I was satisfied in my own mind that
this was a ratification of the original power of at-
torney, disposing of the original claim. Mr.
HALL. — Read the question again to the witness,
and I ask him to note it carefully, and to give an
answTer to it. (Question read.) A. I then believed
that I did know. Q. Do you know now how many
claims you then thought that you were located on?
A. Repeat that, please. (Question read.) A. The
matter has passed my mind. Q. You have used the
word or words, "one claim''; wThat did you mean by
that? A. I mean the legal limitation wThich a lo-
cator is bound by. Q. Did you know at the time
you executed Exhibit No. 9 how many location
notices of association placer mining claims your
name appeared on in the State of California as an
associate locator? A. I did not inquire. Q. Did
you know how many association locations your name
appeared on? A. I don't remember. Q. At the time
you signed Exhibit No. 9, did you receive anything
of value for signing it? A. I don't remember. Q.
What was the next paper or instrument that you
signed, after you executed Exhibit No. 9? A. I
don't remember. Don't remember whether I had any
stock in the Empire Oil and Development Company
at that time. Don't remember that I ever had any
stock in that company. Q. Had you acquired it

California Midway Oil Company et ah 283

(Deposition of Julian P. W. Richmond.)

before or after you executed the original power of
attorney ?

The WITNESS.— Can I say anything apart from
the record?

Mr. ACH. — Say anything you want.

The WITNESS.— Gentlemen, it is simply this:
That I have not been in touch with any one of you,
no one in this room have I seen before Monday,
and I am entirely at sea as to these things; you
have to go over this thing slowly and have a little
patience, and you will have to refresh my memory
on each one of these things. Now, you speak of
a power I made and acknowledged prior — Q.
Well, [249—142] prior to the time— I will just
change that: Had Mr. C. W. Thorn, or Mr. L. B.
McMurtry, or Mr. F. H. Searls sold you any stock
in any oil company prior to the time you executed
the power of attorney in December, 1907? A. Mr.
Thorn has pledged with me on several occasions
many shares of oil stock. Q. Have you purchased
outright and were you the owner, either by purchase
or by condemnation of pledge, any stock? A.
Please limit these stocks to certain ones which have
to do wTith your question. There are many oil stocks
in the market. Q. Did you have any stock in your
possession of which you were the owner in the Em-
pire Oil & Development Company prior to the time
you executed the power of attorney in December,
1907? A. Please go back and tell me which is the
Empire Oil & Development Company, wTho are its
officers or something more definite about that com-

284 The United States of America vs.

(Deposition of Julian P. W. Richmond.)
pany; I am mixed up with these different com-
panies. Q. As near as I understand the situation,
it was a company of which Mr. L. B. McMurtry
was either the president or some other officer, and
the stock of which was being sold in New York City
in 1907— A. Previous— Q. By Mr. C. W. Thorn.
A. Previous to this power of attorney? Q. Yes.
A. Previous to any one of the documents here men-
tioned? Q. Yes, previous to the execution of any
of the documents. A. I don't remember purchasing
any such stock. Nor had any such been presented
to me. I hold at present certificates which are prob-
ably the Empire Oil & Development Company, stock
certificates of the Empire Oil & Development Com-
pany. Q. In what w7ay and for what purpose do
you hold them? A. As collateral to a loan to C. W.
Thorn.

Q. I invite your attention now, Mr. Richmond, to
a check, No. 172, dated New York, September 11,
1911, drawn by F. H. Searls on the Second National
Bank of the City of New York, made payable to
your order, Julian P. W. Richmond, for the sum of
$250, and on the [250^143] back thereof is the
following, in typewriting:

"Received from L. B. McMurtry, $250.00 in
full payment for all my right, title and interest
in and to all lands located by said L. B. Mc-
Murtry, on my behalf, in Kern County, Cali-
fornia, pursuant to a power of attorney made
by myself and others to said L. B. McMurtry,
bearing date the 21st day of December, 1907/ '

California Midway Oil Company et at

(Deposition of Julian P. W. Richmond.)

And just below that is signed the name "Julian
P. W. Richmond," and below that is the name of

"C. W. Thorn," and below that is the name of "F.
H. Searls," and then below that is a rubber stamp,
which is immaterial, a bank rubber stamp.

C. W. Thorn presented it to me. Very likely I
read the typewriting on the back before signing it.
I received $250.00 United States currency on that
check from C. W. Thorn, and there were delivered
to me at that time stock certificates; don't remember
in what company. Don't remember whether it was
the Empire Oil & Development Company or the
Columbus Midway Oil Company.

Q. What consideration, if any, did you pay for
the stock certificate that was delivered to you at the
time you signed your name on the back of check No.
172? A. If my memory were properly revised I
could answer this question easily, but I don't re-
member the names nor other details of the oil stock
certificates involved in this questioning. Q. Did
you take the $250 that Mr. Thorn paid you in cur-
rency w7hen you signed your name on the back of
check 172 and give it to him or to any other person,
in payment for the stock certificate which was de-
livered to you at the time you signed check 172?
A. I don't remember. Q. What did you pay, if
anything, for the stock certificate which was deliv-
ered to you at the time you signed check 172? A.
I don't remember. Q. Did you pay anything at
all? A. I don't remember. Q. Why was check
172 given to you to sign? A. The check was not

286 The United States of America vs.

(Deposition of Julian P. W. Richmond.)
given to me to sign. Q. Why was it given to you?
A. I don't remember. Q. Who presented it to
you 1 [251 — 144] A. Mr. Thorn brought the check
to me.

Don't remember that he said anything to me.
Being out of touch with this matter for nearly six
years, absolutely out of touch with this particular
check for six years, I cannot remember anything
very definite regarding it. What I can tell you in
this particular definite matter is vague. I under-
stood— I understand — according to that — I under-
stand now that my impression at that time was that
Mr. McMurtry was consummating a deal for which
it would be necessary to have control of the interest
of his colocators, or the interest of the locators of
the claim in which I was a locator.

Q. At the time you signed that check, did you
know how many claims your name had been used
in locating? A. That question does not mean any-
thing to me. Mr. HALL. — Will you please repeat
the question to him, Mr. Stenographer? Q. (Ques-
tion read.) A. I cannot answer that. Q. At the
time you signed check 172 did you know how many
placer mining claims had been located in the State
of California by the use of your name? A. I did
not know by number. Q. Do you know by descrip-
tion or any other way ? A. Not by technical de-
scription, or by any other technical way. Q. By
any way other than a technical way or technical de-
scription, do you know? A. I was then impressed
with the fact that I had located such claims. Q.

California Mid /raj/ Oil Company et al 287

(Deposition of Julian P. W. Richmond.)
How many? A. I had previously stated that I
thought that there was a legal limitation to the size
and number of such claims located by any indi-
vidual. And that impression still stood. Q. At the
time you signed check 172, how many claims did
you think that you had located? A. I did not think
at that time. Q. (Question read.) A. Particu-
larly upon the number of claims. Q. Hal you any
information or idea as to the number of claims
upon which your name had "been used in making
locations? At the [252—145] time you signed
check 172? A. I had a general idea that I had
located as large and as important a claim as I le-
gally could. Q. What was your idea as to the ex-
tent and area of the claim which you then located?
A. My idea was that it was a maximum claim
allowed under the law. Q. What was the source
of this information as to the extent and area of the
claim which you had located? A. My own general
knowledge. Mr. HALL. — Read the question again.
I insist it is not responsive. A. I will go on record
as saying that I did not bother about the size of the
claim. A claim was a claim to me. Don't remem-
ber that any explanation was made or anything
said to me about the typewriting on the back of
check 172. Very likely I read it. Don't remem-
ber what I thought I was doing when I signed that
typewriting on the back of that check.

Q. Did you know at that time of what all your
right, title and interest in and to all lands located
by said L. B. McMurtry on your behalf in Kern

288 The United States of America vs.

(Deposition of Julian P. W. Richmond.)
County, California, consisted? A. Outside of its
money value, I did not know. Q. What did you
know its money value to be? A. I believed its
money value to be very small. Q. Can you fix that
in dollars and cents for us? A. My answer is that
I had had these various oil companies investigated
and had come to the conclusion that their stocks
were nearly worthless, so that when Mr. Thorn
offered me payment for a stock certificate of a com-
pany wiiose name I don't remember, it is very likely
thai I accepted this check and another stock certifi-
cate for the transfer of a stock certificate in my
name for shares in a company whose name I don't
remember. Q. Was this check No. 172 given to you
in payment of the transfer from you to Mr. Thorn
of a stock certificate in some oil company, or was
it given to you for the purpose recited by the type-
writing on the back of the check? A. The answer
is, [253 — 146] probably a combination of those
purposes. Q. At the time you received check 172,
was there anything said to you by any person with
respect to any payments that wTould be made to
you in the future by reason of your having exe-
cuted the power of attorney in December, 1907?
A. I don't remember. Q. I invite your attention
nowT, Mr. Richmond, to certificate No. 28, found in
the original stock book of the Pacific Oil Lands
Company, which discloses that on September 1,
1911, there was delivered, rather there was issued
to Julian P. S. Richmond, certificate No. 28 for
1,000 shares of the capital stock of the Pacific Oil

California Midway Oil Company ei al, 289

(Deposition of Julian P. W. Richmond.)

Lands Company. I also invite your attention to a
receipt attached to the stub of the certificate No. 28,

which receipt reads as follows: "Received certificate
28 for 1,000 shares of Pacific Oil Lands Company
stock, dated September 12, 1911." That is signed
"Julian P. W. Richmond." Is that your signature

on that receipt (showing witness) I A. That is my

signature. Q. When did you receive certificate No.
28? A. It is most probable that I received certifi-
cate 28, of record here, September 12, 1911.

Don't know who delivered certificate No. 28 to
me, or whether it was delivered by some person or
by mail. I knew at the time why it was delivered
to me, but don't remember now. If this certificate
is a certain certificate which I have in mind, it was
delivered to me because I was one of the colocators
of a certain claim. Don't know what claim it was
or where, only that it was in California. Don't re-
member any of the circumstances attending its de-
livery to me, or how long I kept it. That is my
signature on the back of the certificate. Don't re-
member when I signed that. The occasion for sign-
ing was that I received other good and valuable
consideration therefor. Don't remember what or
from whom I received it. The fact that "Walter
S. Brann'' appears to be the transferee d*>i'> [254
— 147] not recall to my mind from whom I re-
ceived the consideration. After endorsing the cer-
tificate I must have given it in exchange for some-
thing. Don't know to whom. I believe I gave it
in exchange for other stock. Don't remember the
next paper I signed.

290 The United States of America vs.

(Deposition of Julian P. W. Richmond.)

(Plaintiff's Exhibit 10 read in evidence. It is
a proxy similar in form to Plaintiff's Exhibit 5
with the deposition of Frank B. Chapman, and pur-
ports to have been executed by Julian P. W. Rich-
mond, August 12, 1913.)

It is too bad that everything I have to say goes on
the record. I have other things to remember than
every little piece of typewriting that I signed.
(After reading.) I signed many such proxies and
signed that proxy. C. W. Thorn probably pre-
sented that to me for my signature. He may have
sent it to me by mail. I think I interpreted it my-
self. May have talked with C. W. Thorn about this
proxy but do not recall the details of the conversa-
tion. Signed it for the same reason that proxies
are usually signed — for the reason of inability or
disinclination of the principal to perform the work
delegated to the proxy.

(Paper offered in evidence as Plaintiff's Exhibit
11 in connection with this deposition. It is a con-
sent to declare dividends similar in form to Plain-
tiff's Exhibit 6 with the deposition of Frank B.
Chapman.)

I believe that paper (Exhibit 11) wrhich I signed
came through the mail. Believe I received this
paper which bears the title " Pacific Oil Lands
Company," also " First Report to Stockholders,"
dated January, 1914; don't remember when I re-
ceived it or when with reference to the time I
signed the consent to the distribution of the $20,000
dividend on January 7, 1914. Very likely I read

California Midway Oil Company et <d. 291

(Deposition of Julian P. W. Richmond.)
this report at the time I received it. Don't re-
member whether I received any money or thing
of value after signing this consent to the [255 —
148] dividend distribution.

Q. I now invite your attention to check dated
San Francisco, 1/12/14, No. 1206, drawn on the
Bank of California, National Association, San
Francisco, made payable to the order of Julian
P. W. Richmond, in the sum of $20.00, signed
Pacific Oil Lands Company, F. E. Harrison, Secre-
tary and Treasurer; L. B. McMurtry, Vice Presi-
dent; and bearing on the back thereof the following-
endorsement in writing: "For deposit, Julian P.
W. Richmond," and underneath that "Julian
Richmond," and other rubber stamps of banks
apparently. Will you please examine that check
(showing witness) ?

A. That is my endorsement. I received and
cashed that check, but don't remember from whom.
Don't remember that I received any money after
receiving this check for $20.00.

Q. Do you know whether or not you received
this check for $20.00 because you had signed the
power of attorney in December, 1907? A. I do
not believe so. Q. Why do you think you did
receive it? A. I believed it wras a bona fide divi-
dend.

This check was deposited in my own bank
January 20, 1914. Don't remember whether that
was before or after I surrendered certificate Xo. 28
in the Pacific Oil Lands Company, or whether I

292 The United States of America vs.

(Deposition of Julian P. W. Richmond.)

have any interest in that company. Don't know

whether I have any stock certificate. Don't think

I have any Pacific Oil Lands Company stock at

present.

Q. Can you now tell me how much money you re-
ceived by reason of the fact that you signed the
power of attorney on December 21, 1907, appoint-
ing Mr. McMurtry as your attorney in fact for the
purpose which I have theretofore mentioned.
A. I don't acknowledge having received money
from Mr. McMurtry. Q. How much money have
you received from any person or any corporation,
or any persons, or any corporations, or any other
sources whatsoever, by reason of the fact [256 —
149] that you signed a power of attorney on
December 31, 1907, constituting Mr. McMurtry
your attorney in fact for the purpose I have
mentioned'? A. I don't know that I received any
money for any purpose so mentioned, and I don't
know what sums of money I received from any
persons or corporations mentioned. Q. What sum
or sums of money, if any, have you received from
Mr. McMurtry, or any other person, or any persons
or corporations by reason of the fact that Mr.
McMurtry, acting as your attorney in fact, used
your name in the locations of placer mining claims
on the public domain in California? A. I don't
remember receiving other sums than those indi-
cated by the twTo checks shown to me to-day. Q. To
refresh your memory, Mr. Richmond, didn't you
receive the sum of $300.00 from Mr. C. W. Thorn

California Midway Oil Company et ah 293

(Deposition of Julian P. W. Richmond.)
at the time you surrendered certificate No. 28 in
the Pacific Oil Lands Company? A. I don't re-
member receiving money from Mr. Thorn at that
time. Had received money from Mr. Thorn, but
do not recollect the purpose. Q. Was any report
ever made to you by any person of the transactions
surrounding the location of the public domain in
the State of California, in making placer mining
locations in which your name, Julian P. W. Rich-
mond, appears as a locator? A. My answer is, I
believe I received reports of progress upon such
locations. Believe I received verbal reports and
reports in typewriting by mail. Believe I made
inquiries verbally of Mr. Thorn at the time I signed
check No. 172, regarding the development of the
locations in which I was interested. Learned that
such development was progressing, that Mr. Mc-
Murtry was personally present, and had set drilling
rigs. Did not inquire as to the description of the
claim or claims upon which McMurtry had set up
drilling rigs — believe that to be of record.

Q. Do you know the description of the claim or
claims upon [257 — 150] which Mr. McMurtry had
set up drilling rigs? A. I was not interested, as
I thought then that a locator's claim was restricted
by law to a certain area or quantity, and that I
had located the full extent or limit of such law.

Have not instituted any action at law against L.
B. McMurtry. I have the matter in mind. Have
not sought any legal advice on the question or dis-
cussed it with anyone.

294 The United States of America vs.

(Deposition of Julian P. W. Richmond.)
Cross-examination.

I cannot tell whether I ever have met L. B. Mc-
Murtry. Was never in San Francisco. Have no
recollection of ever going to the Knickerbocker
Hotel to meet anyone in connection with this trans-
action in California. Very probably I talked with
the person who gave me this check No. 172 of
$250.00 concerning giving it to me. Cannot tell
whether I am friendly with Thorn now. Have had
no disagreement with him. The name of the
Columbus Midway Oil Company is familiar to me.
[258—151]

Q!. Did this Special Agent, when he took the
statement which is referred to by Mr. Hall, in his
remarks, swear you, or do you remember whether
he did or not? A. I don't remember.

The statement was made at my home in Yonkers,
New York, where I believed the writing was done.
He came and saw me while I was in quarantine on
account of infantile paralysis. I was extremely
agitated in mind at that time. Yes, before he left
I had an understanding of the motive of his call.
He was at the house possibly an hour. Am an office
employee of the city of New York. Visit and in-
spect construction work, but do not direct it. "My
work is of this nature, that I write or assist in writ-
ing the reports regarding construction of the Cat-
skill Aqueduct, which are published, and also I very
often interview representatives of the press, give
information to inquirers, give public lectures, and
act a little bit of a publicity man." In the office

California Midway Oil Company et ah 295

(Deposition of Julian P. W. Richmond.)
of the Board of Water Supply.

Q. You said something about your necessity of
remembering other things besides pieces of paper
to which you had appended your signature. Have
you been engrossed in the work in which you have
been engaged in the last year or two? A. I have
other activities besides this position with the city.
Q. And what is it, then? A. I am interested in
another business. Q. Might I inquire? A. It is
the sale of a patented article which bears my name.
Q. Being what ? A. Called the Eichmond screw
anchor. It is a form of expansion bolt, if you wish.
I have men to whom I pay salaries for selling that
article. Q. And how long have you been engaged in
that business? A. For a number of years. Q.
Have an office in New York City, too, have you?
A. Yes, sir. Q. Did you have any agreement or
understanding, express or implied, of any kind or
character, that your name was to be used [259 —
152] as a locator for the benefit of anybody else at
the time or would be at the time you gave your
power of attorney, and by that I mean whether you
had agreed in any way in your name that your
rights could be used for the benefit of Mr. McMur-
try, or any person, firm or corporation? A. I had
•no understanding that my name would be used to
an undue extent for the benefit of others than my-
self. Q. In the matter of the location of lands, is
it not true that no person ever suggested or in-
sinuated to you that they were to have any interest
in any lands that were located for you in your

296 The United States of America vs.

(Deposition of Julian P. W. Richmond.)
name? A. I understood that I was a copartner in
the location. Q. Yes. You mean a copartner with
your other locators? A. With the other locators,
yes. Q. Now, is it not a fact that Mr. Thorn was
trying to convince you at the time you executed
this power of attorney, and before, that he was giv-
ing you an opportunity by these locations, or by
giving authority to some one else to locate for you,
giving an opportunity to you of possibly to make
some money in oil or oil lands out in California?
A. Mr. Thorn was indebted to me, and still is, and
I consider that he presented to me an investment
opportunity. Q. Is it not a fact that Mr. Thorn
told you that Mr. McMurtry had in view some lands
or a section of the country out in California, where
he thought he might be able to locate some lands
that might produce oil ? A. I am not sure that Mr.
McMurtry named or mentioned that. Q. The
power, you will recall, ran to Mr. McMurtry? A.
I recall.

Have not given this matter any considerable
thought since was interviewed by Special Agent
Favorite. Have no definite recollection as to how I
disposed of certificate No. 28 for 1,000 shares of
Pacific Oil Lands Company stock.

Q. Does the asking of this question refresh your
recollection: [260 — 153] That you were inter-
viewed by Mr. Thorn, Mr. Searls — both Mr. Thorn
and Mr. Searls — and told that the lands covered by
these locations were being claimed by the Govern-
ment and that it was an opportunity for you to get

California Midivay Oil Company et ah 297

(Deposition of Julian P. W. Richmond.)
$500 in cash for your interest and your stock, and
that you could either take $500 or take your chance
on the result? A. I recollect a discussion with Mr.
Thorn upon that broad matter; I do not recall the
sum stated. I recall that at the time of giving up
my stock certificate No. 28 and the Columbus Mid-
way stock certificates, that I received coin or cur-
rency from Mr. Thorn, but I don't remember what
other transaction took place without having my
memory refreshed.

My father-in-law is an employee of the Stand-
ard Oil Company, and has been all of his life. He
knows the editors of many oil papers, and I told
him of the interest I had in these stocks, and he
wrote out a list of oil stocks and was informed that
the stock was worthless, and someone came to me
and offered me good money for worthless stock, and
I made the exchange. No one, to my knowledge,
had any interest in my individual rights as a locator
in these lands.

Q. Did you have any agreement in writing by
which, in the event of your death, or in the event of
your insolvency, or bankruptcy, or incompetency,
to the effect that whatever interest you had in any
of those locations, was to go and become the prop-
erty, either in whole or in part, of L. B'. McMurtry,
or anybody else0? Did you get the question0? A. I
get the question, but I don't see its reference to
your preceding question. Q. It has no reference
to my preceding question. A. Has it any reference
to the endorsement on the back of that check? Q.

298 The United States of America vs.

(Deposition of Julian P. W. Richmond.)
No, sir. My inquiry or question is as to the fact
whether or not, either [261 — 154] before or after
you became a locator of lands, you ever signed any
documents to the effect that, in the event of your
death, insanity, or incompetency, or any other con-
tingency arising, that whatever rights you had as a
locator should pass to Mr. McMurtry or anybody
else, either in whole or in part? They charge you
with being a "dummy" locator, and I want to find
out whether you are or not.

A. I don't recollect making any such provision.

No, I had no intention, in the event that I should
die or become incompetent, that my interest in lands
located out there by reason of my power of attor-
ney, should go to anybody other than as I should
will it, or to my heirs at law, in the event of my
death. The question never arose before me.

No, one, to my knowledge, had any interest in
these stocks besides myself. I did not account to
anyone else for the money which I received on ac-
count of those locations or the lands located there-
under or the power of attorney. I do not think
anyone has asked me to account for anything received
or made any claim that they had an interest in
whatever I was entitled to [262 — 155] by virtue
of any locations that were made in California. I
do not think anyone asserted any claim to any of
the stocks or money which I received by reason of
this transaction.

Q. What do you mean by "I don't think so"; to
you mean that you have no recollection of anybody's

California Midway Oil Company et al. 299

(Deposition of Julian P. W. Richmond.)
so doing? A. I don't remember the idea coming
to me at all. Don't remember that anybody ever
made any demand or claim one way or the other. I
don't remember that anybody did, and I don't re-
member that they did not. I now clearly remember
that Thorn came to see me twice in regard to my stock
in the Pacific Oil Lands Company. He came once
without money and the second time he came with
money, winch makes a great deal of difference. I
believe he had three hundred dollars. Am not sure
that it was not $500. Do not recall what he told
me on either visit. Was very busy, as I was going
to Europe on a business trip in about three days.
The whole thing was wound up before I left.

Q. Can you recall now that anything was said at
that interview to the effect that — counsel will notice
that the paper directly in front of me now and
the one to which he referred — that he said to you
that time that this stock represented your interest
in these locations ; the Government was claiming the
lands, and that he was authorized to offer you five
hundred dollars for your interest, and that you
could take it, if you wanted to, or speculate on the
result —

Let me advise you that I am not reading from the
paper. I am not intending to deceive you or any-
body else in that way. A. In a general way, I
recollect that Mr. Thorn said that the future of this
company was very precarious; that I could cash
either the whole of part of my holdings through him
and that is about all I can recollect. Q. Well, do

300 The United States of America vs.

(Deposition of Julian P. W. Richmond.)
you remember whether he [263 — 156] stated
he was acting for anybody else in the matter or not ;
have you any recollection on that*? A. I remember
tli at Mr. Thorn at one time told me that he was act-
ing for Mr. McMurtry, but I do not recall that it
was this question. Q. It was long prior to that, if
I understand you correctly, that you had had these
stocks looked into by your uncle or relative, and he
advised you that they were not of value? A. I am
not answering as to the time. Q. Well, is it a fact
that, at the time Mr. Thorn came to see you, you
had given up all hope of realizing anything out of
that stock? A. I am not the kind to give up all
hope, at any time, Mr. Ach. I am very optimistic.
I had given up probably as much hope as I had
given thought to the matter. I was never very
deeply interested in these things, this particular
deal.

Don't remember what I told Mr. Favorite,
Don't remember w7hat I told Mr. Favorite. If I
discussed it with him, it would have been in an un-
official way, for I knew who he was. No, I had no
intention of defrauding the Government of any
rich mineral land or aiding or assisting anyone else
in cheating or defrauding the Government. In au-
thorizing McMurtry to locate the land in my name
I had no idea or intention of assisting McMurtry
or anybody else in obtaining a greater acreage or
quantity of mineral lands than he was by law en-
titled to. Nothing that I should characterize as
shady in this transaction wras ever suggested to me.

California Midway Oil Company et al. 301

(Deposition of Julian P. W. Richmond.)
No such thought ever was presented to me. There
was no hidden understanding between McMurtry or
Thorn and myself. Don't remember what sum I
received when I sold my stocks. Don't remember
the details of that transaction.

Q. Now, when you received this report, entitled,
"Pacific Oil Lands Company, First Report to Stock-
holders," you stated to Mr. Hall that you had read
it? A. I believe I have read it [264—157] be-
fore coming here. Q. By this report you were ad-
vised that a contract had been made with the Asso-
ciated Oil Company of and concerning 1440 acres
of these lands? A. Yes, sir. It made no impres-
sion on me at the time.

(The substance of this report being called to the
attention of the witness.)

I believe I understood it at the time.

Q. Well, now, I have passed that, and I want to
know whether it is not true that you knew when
Mr. Thorn came to you and wTanted to buy your
stock that at that time he told you personally that
the Government, acting in the matter in some way
or other thought this was questionable and doubtful,
that is, whether the Government would take these
lands away, or something of that character, and
that he told you this in order to give you some rea-
son why you should sell the stock? Now, I want
you to give me some good, common-sense reason for
your selling the stock after receiving information
that there was $1,375,000 the Associated Oil Com-
pany was to pay? A. The $1,375,000 is very small

302 The United States of America vs.

(Deposition of Julian P. W. Richmond.)
to divide into a million parts. Q. And even so —
A. Of which I had a few. Q. Even so— A. And
the proviso there is that, if the Government refused
to grant a patent to the land, that seemed very
plausible to me; and those things combined were
sufficient then and would be still sufficient for me
to part with my stock for cash. Q. I know from
hearing you testify that you read every document
that you received. This particular piece of stock
or certificate representing the stock, shows that the
par value of the stock was $1.00 per share, and
there were a million shares of stock. Now, this
communication which you received and read showed
that the Associated Oil Company had agreed to pay
for these 1,440 acres of land in which you were in-
terested— [265 — 158] A. I did not know beyond
the particular land I was interest.

I had twro motives in disposing of whatever stock
I did, or for whatever sum I received, and one was
that I needed some money at that time, and the
other one was the fear of litigation. Did not give
up this stock because I believed it belonged to some-
body else or that any part of it, in equity or fair-
ness, or by reason of any agreement, express or im-
plied, belonged to Mr. McMurtry or Mr. Thorn or
anybody else. In my mind I grouped together
the thousand shares of the Pacific Oil Lands Com-
pany and the 750 shares of the Columbus Midway
Company.

Not to my best recollection did I receive a report
from McMurtry, Thorn or anybody to the effect

California Mid/cay Oil Company et ah 303

(Deposition of Julian P. W. Kichmond.)
that they had located on any particular quarter sec-
tion or twenty acres. Don't remember receiving
any letter from McMurtry concerning these loca-
tions. Don't remember any statement to me by
Thorn, S earls, McMurtry or anybody as to any
interests of mine in this specific mining claim or
that specific mining claim in California or else-
where.

Q. Was there any suggestion made S. H. Free-
man or Harry B. Thorn, to you, or by you to either
one of those men, that your locations or the loca-
tions which would be made by Mr. McMurtry under
this power of attorney, were intended to be loca-
tions for Mr. McMurtry or for any other person than
yourself, either one of them'? A. My impression
then was that it was a co-operative scheme. Q.
Among whom, the locators'? A. As provided by
law. Q. Eelative to the assessment work that the
law requires upon locations, and relative to the de-
velopment work, is it a fact that Mr. Thorn told
you that if Mr. McMurtry located any lands in the
names of these locators, that the lands would be of
such character that he could borrow enough money
on the lands to do the assessment work, and the de-
velopment work? A. I took that [266 — 159] for
granted, probably. Q. Well, I want to know
whether it is not a fact that Mr. Thorn made a state-
ment of that character to you at the time you signed
the power of attorney, or before? A. The thing
seems so plausible, that I do not recall anyone
suggesting it to me ; it would occur to me naturally,

304 The United States of America vs.

(Deposition of Julian P. W. Richmond.)
I think. Bere is a — Q. Is it not also a fact that
Mr. Thorn told you, either before or at the time
of your giving the power of attorney, that there
would be no charge for Mr. McMurtry 's services,
unless he located lands out of which avails would
come over and above the expense, and that then his
compensation was to be fixed when the result was
attained? A. I don't remember; the question is
difficult. Q. You are aware that Mr. McMurtry was
not a locator upon any of these lands where your
name was used, are you? A. I was not positively
aware at that time; my impression was otherwise.
Q. Was there anything said to you that you can
remember as to whether Mr. McMurtry was to be
paid any money out of the avails of these lands
in the event that he should locate lands and they
should turn out to be oil lands? A. I remember
very little about Mr. McMurtry's connections with
these locations.

Believe it is a fact that I did not put up any
money for location expenses or assessment expense,
nor do I remember any call being made upon me by
McMurtry or anybody else for such purposes or my
refusal to do so. Don't remember my impressions
as to the details of the financing of the development.
My impression was that the development was prob-
ably upon a share and share basis, something like
farmer and tenant, owner and farm tenant.

Redirect Examination.
No, there was nothing unpleasant in the interview
with Mr. Favorite at my home on August 25, 1916.

Call forma Midway Oil Company et al. 305

(Deposition of Julian P. W. Richmond.)
He showed me certain [267 — 160] credentials,
asked me certain straightforward quesions, which
I felt morally obliged to answer and I did.

(Said affidavit offered and read in evidence, as
follows:)

" Julian P. W. Richmond of Yonkers, New York,
being sworn, states:

"I am acquainted with C. W. Thorn and have
known him for many years. In 1907 and 1908
Thorn had an office in the same building with me
in New York.

"At this time I cannot recall the circumstances
under which in December, 1907, I agreed to execute
the power of attorney to L. B. McMurtry to make
mining locations for me, nor can I recall what
representations or promises were made to me at the
time this power of attorney was signed.

"In the spring of 1908 I loaned C. W. Thorn
$300 and he gave me as collateral or security some
shares of stock in the Empire Oil and Development
Company. Some time later Thorn not having re-
paid the money came to me and suggested that I
become one of the eight locators of new and
promising mining claims through which, without
expense on my part, I would have the chance of
reaping a reward wrhich would offset the unpaid
loan. He did not tell me that I would have a one-
eighth interest in the lands to be located. It was
my idea of the matter that Thorn told me of this
proposition as a favor to me on account of the
money which I had loaned him. It was my under-

306 The United States of America vs.

standing that Mr. McMurtry [268—161] was in
a sense my resident agent, squatting on the land
and looking after the interests of myself and the
other parties.

"This talk with Thorn took place at or about the
time I signed a paper dated Aug. 16, 1910, in which
I ratified the previous powTer of attorney I had
signed.

" Sometime after this paper above mentioned
was signed C. W. Thorn came to me and gave me
some stock in the Pacific Oil Lands Co. I don't
remember what he told me at the time he gave
me the stock, nor do I remember how many shares
of stock I received in said company.

"Several years after I received this stock, and
to the best of my recollection sometime in the
spring of 1914, C. W. Thorn came to see me and
asked me if I w7anted to sell the stock in the Pacific
Oil Lands Co. At that time I had some difficulty
finding the stock certificates, having given up hope
of realizing anything out of the stock. Thorn came
back a second time and I turned over the stock
certificates to him and he paid me something like
$300.

"I have an indistinct recollection of having made
a money loan to Thorn previous to December 21,
1907; in fact I still have in my possession an un-
paid note from Thorn for $100 dated January 29,
1908. It is possible this note covers an earlier
loan.

"JULIAN P. W. RICHMOND,

"21 August, 1916."

California Midway Oil Company et ah 307

(Deposition of Julian P. W. Richmond.)

Subscribed and sworn to before me this 21st day
of August, 1916.

J. H. FAVORITE,
Special Agent, G. L. O. [269—162]

Mr. Helm came to see me between the time I was
served with the subpoena and the date of my re-
quired appearance. (Mr. Helm identified in court-
room.) He gave me his card. He told me in a gen-
eral way that he was associated with the interests
counter to the Government, that Mr. Ach, the chief
counsel for the defense, had met other locators be-
sides myself. The conversation was probably
lenghtier than that, but that was the gist of the con-
versation.

Q. When you disposed of your stock in the Pacific
Oil Lands Company, did you know how many shares
of stock in that company Mr. L. B. McMurtry
owned ? A. I probably took no interest in the mat-
ter. Q. Well, did you know how many shares of
stock Mr. McMurtry then owned in the corporation?
A. I don't remember, no. Q. Did you know howr
many shares of stock any other person other than
yourself owned — the corporation? A. I don't be-
lieve I did. Q. Did you know what were the re-
sources of the corporation? A. At what time, Mr.
Hall? Q. At the time you parted with your certi-
ficate of stock in the Pacific Oil Lands Company.
A. I believe I had certain information at hand, such
as the Pacific Oil Lands Company's first report to
stockholders. Q. Did that report guide you in the
value which you placed upon your shares of stock

308 The United States of America vs.

(Deposition of Julian P. W. Richmond.)
in the corporation. A. I don't think so. Q. On
your cross-examination you told Mr. Ach that Mr.
Thorn offered you an opportunity to invest in this
matter. What did you invest in the matter? A. Is
thai my very first transaction? Q. I mean at any
time in this transaction. A. I understood at the
time — I believe at the time that I had the right to
make such locations — Q. I did not ask you that,
Mr. Richmond. A. And having once made certain
locations, I would be estopped from making other
locations, and my investment was my original power
of attorney [270 — 163] Q. Did you invest any
money in this transaction? A. The answer is, not
directly. Q. Did you indirectly? A. I had a men-
tal reservation — Q. I asked you not about mental
reservation, but what you did. A. I think I have
answered. Q. I ask you to answer it again.
Q. What money you invested in this investment?
A. I did not invest money in the sense that money
is usually invested. Q. Well, in what sense then did
you invest money ? A. I thought at that time that my
opportunities for locating claims were limited and
that by once having located a claim I could then in
future never locate any more. In other words, I
gave up something which was irrevocable. Q. I am
asking you about what money you invested. A. I
invested no sum of money outside of possible in-
cidental expenses. Q. What were your incidental
expenses? A. Carfares and postage.

At the time I transferred my stock in the Pacific
Oil Lands Company, I believe I parted with the

California Midway Oil Company et ah 309

(Deposition of Julian P. W. Bichmond.)
whole of my holdings. When I said on cross-exami-
nation that at the time of signing the power of at-
torney my impression was that it was a co-opera-
tive scheme my understanding was that those
acting with me were, the number of persons
whom the laws empowers to so act. I don't
remember all of the persons that I under-
stood were so acting. I can only distinctly recall
Mr. Thorn's son, Harry Thorn, and his son-in-law,
whom I do not recollect by name; Mr. Thorn was
present and may or may not have been a locator.

Q. What was said by anyone at or prior to the
time you executed the power of attorney as to Mr.
McMurtry's compensation in these transactions?
A. I don't remember it being mentioned. Q. Did
you have the impression at that time that Mr. Mc-
Murtry was a locator, too? A. I don't remember
that Mr. McMurtry was in my thoughts at all at the
time. [271 — 164] Q. And did you know to whom
j\m were giving your power of attorney ? A. I must
have known at the time. Q. Then who was it?
A. I now believe it was Mr. McMurtry. [272—165]

Deposition of Edwin L. Powell, for Plaintiff.

EDWIN L. POWELL, a witness called April 17,
]917, on behalf of the plaintiff, testified by deposi-
tion as follows:

Beside at Somerville, Massachusetts. Am vice-
president of the H. E. Holbrook Company, manu-
facturers' agents of window screens, etc., and also
manufacturers of certain hardware specialties.

310 The United States of America vs.

(Deposition of Edwin L. Powell.)
Was a partner in the company from 1898 to about
1911, when the partnership was turned into a cor-
poration, since which time I have been vice-presi-
dent. Was born in Indianapolis, Indiana, and was
educated in the public schools of Indianapolis,
Brooklyn, New York, and Stanford University, at
wrhich latter institution I was two years, not com-
pleting the course on account of illness. Lived in
California about three years, during 1894-1897.
Was not engaged in any business there and learned
nothing of the oil fields while there. Was in San
Francisco from November 12 to December 10, 1916,
in connection with Government suits against cer-
tain oil companies. Don't know their official titles.
Yes, believe it was United States against the 32 Oil
Company and others, No. A-38, and United States
versus Record Oil Company, A-41. Was requested
to go by telegram from Mr. Helm, now present in
the courtroom. I testified on the side of the defend-
ants. Mr. Helm had previously interviewed me and
given a brief outline of this matter, and said that
there was a possibility that my presence would be
desired in California in connection with it. I knew
in a general way he represented the Oil Companies
who were defendants, but did not know who they
were. After I was in California I commenced suit
against several different persons, Mr. McMurtry, E.
A. Hoeppner, Mr. Searls, and Mr. Harrison I be-
lieve was mentioned also. Believe that suit is
pending. Suppose [273 — 166] it is pending in
California. A. I. McCormick is my attorney and

California Midway Oil Company et ah 311

(Deposition of Edwin L. Powell.)
was suggested to me by Mr. Helm. The suit was to
obtain an accounting in certain transactions in which
Mr. McMurtry wTas my agent, in the location of oil
lands under power of attorney, which I gave him.
Was in New York in May, 1907. First became ac-
quainted writh L. B. McMurtry during the year 1906.
Was then a salesman for the Underwood Typewriter
Company, and met McMurtry at No. 299 Broadway.
I introduced myself to him. He was then in the oil
business. Don't remember exactly the title of the
company. Believe it was called " Great California
Consolidated Oil Company." Sold him some type-
writing machines. Received stock in the Empire Oil
& Development Company in payment. Called there
quite frequently and Mr. McMurtry talked oil to me
a great deal, and I was quite interested in his pro-
position and sort of gradually got into it myself.
Finally, on June 3, 1907, gave up my position with
the Typewriter Company to go with McMurtry.
Went with him to attempt to help finance the com-
pany, to sell stock in the Empire Oil & Development
Company. Sold stock locally, then went out of town
and went to Canada. Had a few hundred shares of
Empire Oil & Development Company stock at the
time I went with McMurtry; shares that I had re-
ceived in payment for typewriters and from time to
time Mr. McMurtry gave me stock in the company
as part payment for my services. Received a com-
mission for selling this stock, either twenty or
twenty-five per cent— don't recall exactly. C. W.
Thorn was employed in McMurtry 's office then, F.

312 The United States of America vs.

(Deposition of Edwin L. Powell.)
II. Searls was also sometimes. Don't recall what
Thorn did, but he was running errands, I believe,
and did whatever office boy work that was required.
Believe Searls was treasurer of the company. I was
then engaged until December, 1907.

Q. I exhibit to you a certified copy of the power
of attorney [274 — 167] given by yourself and
others to Mr. L. B. McMurtry on December 18, 1907
(Plaintiff's Exhibit 7). Did you sign such an in-
strument? A. Yes, sir.

Signed it in the office of the Empire Oil & Devel-
opment Company, 299 Broadwray. McMurtry asked
me to sign a few days before. The matter had been
discussed a number of times and he mentioned the
possibility of locating public oil lands in California,
explaining quite fully the procedure, and suggested
that he obtain a power of attorney from a number of
interested parties and asked me to secure some, so
that if, when he returned to California, there were
public oil lands, which might be available as oil lands,
he would be in a position to locate them. By inter-
ested parties he meant those interested with us in
the Empire Oil & Development Company. This com-
pany was in bad condition at that time, the attempt
to finance it having proven a failure on account of
the panic of November, 1907, and they had reached
the end of their rope. I do not recall what their en-
tire objects were. They were to obtain and develop
oil lands in California, but just the scope of it, I do
not recall at this date. Believe they claimed to have
options on same properties and leases on others —

California Midway Oil Company et al. 313

(Deposition of Edwin L. Powell.)
oil lands in California. No development was being
carried on then to my knowledge. Interested in this
company were Mr. Thorn, Mr. Freeman, Mr Searls,
Mr. Harder and myself. Those were the ones im-
mediately interested. McMurtry left New7 York a
few7 days after the signing of this power of attorney,
about December 20.

Q. Then you think the matter of the execution of
the power of attorney was talked of just a few days
before it was executed, finally executed? A. The
definite talk on it, yes; it had been discussed prob-
ably for a good many wTeeks before then.

I asked Taylor and Meinecke to sign this pow7er
within a [275 — 168] short time, within a few7 days
before signing. Cannot fix the time. It was pos-
sibly a week before, but do not think it w7as as much
as tw7o weeks. Had knowrn Meinecke eight years.
He was employed by the Underwood Typewriter
Company. Talked more or less about the general oil
matters w7ith Mr. Meinecke, as I had with others in
the Underw7ood Typewriter Company, and I ex-
plained the situation to him to considerable length as
to the possibility of there being oil lands in Califor-
nia, which could be located, and I represented to him
that if he signed the power of attorney and gave Mr.
McMurtry authorization to locate the lands in his
name, that it might be to his financial advantage.
Don't remember whether I was present when he
signed I probably did ask him to go up to the office of
the company and I possibly might have gone up with
him, but I don't recall that definitely. Taylor was an

314 The United States of America vs.

(Deposition of Edwin L. Powell.)
intimate friend of mine. He had lived with me for
a number of years in my home and he wras from
California. When he first came to New York, he
worked with the UnderwTood. Told him substan-
tially the same thing that I did Meinecke. McMur-
try had explained the placer mining laws to me. I
understood that one man could locate twenty acres in
one parcel; I understood in order to locate a large
area it was necessary to associate persons under
groups of eight. Don't recall being present when
any of the others signed. After signing this power,
up to March, 1908, and when I left New York, I was
frequently in the office of the Empire Oil & Develop-
ment Company. Received a few letters during that
time, probably half a dozen in all. Had no definite
news from Mr. McMurtry during that period.
Simply knew that he was busy trying to locate lands.
Inquired of Searls about this matter by correspond-
ence and wrote direct to McMurtry a number of
times. Had no definite information at all, simply
that progress was being made. Believe the report
was that Mr. McMurtry had [276 — 169] located
lands under our power of attorney for us. Q. Did
he tell you where they had been located ? A. In San
Benito. Q. What locations did Mr. McMurtry ad-
vise you had been made in your name? A. He did
not advise me definitely as to just what locations were
made, either the number of them or just where they
were located, but simply the lands that he located
were in the Midway field, and also in San Benito
County, San Benito field. Q- Did he advise you that

California Midway Oil Company et al. 315

(Deposition of Edwin L. Powell.)
he had located lands, both in San Benito field and in
the Midway field in 1908? A. I don't remember. I
would not swear definitely that he did at that time.

Would not be able to fix the date even approxi-
mately as to when I first learned that McMurtry had
used my power of attorney in making any definite
locations. I wras told by Searls and McMurtry that
lands had been located under my power of attorney.
Cannot say just when. The first paper I signed
after signing the power of attorney w^as the ratifica-
tion of that power of attorney.

(This ratification read in evidence as Plaintiff's
Exhibit 12. It is similar in form to Plaintiff's Ex-
hibit 1 with the deposition of Prank B. Chapman,
and purports to have been executed by Edwin L.
Powell August 22, 1910.)

I recognize my signature on this photographic
copy. McMurtry presented this to me personally in
Boston for execution. He said that a ratification
of the powder of attorney which I had given him was
necessary in order to enable him to consumnate cer-
tain deals that he had in prospect. That the lawyers
for the people to whom he was trying to dispose of
those lands required a ratification of this powTer of
attorney to show that we were real people and that
we wrere alive, and that we w7ere in touch with the
matter and approved of Mr. McMurtry 's action. Did
not know at that time [277 — 170] how many loca-
tions had been made in my name?

Q. Did you make inquiry of Mr. McMurtry at that
time in regard to this contract of August 4, 1910?

316 The United States of America vs.

(Deposition of Edwin L. Powell.)
A. I asked what the purport of the document was
and Mr. McMurtry explained that there had been
no contract actually entered into, this was simply a
prospective contract, a preliminary step to a contract
which he hoped to close. He did not tell me any-
thing of the substance or effect of this contemplated
contract with Herrin and others, except that if the
matter wTent through, that it would involve a very
large amount of money, and that I would have a lib-
eral amount coming to me. Between that and the
next step in the proceeding, I might have seen Searls.
I talked with Searls a number of times and wrote him
a number of times in respect to these oil land trans-
actions. He just reported progress and never gave
me any definite information as to how matters were
progressing. Said that McMurtry was still attempt-
ing to put through various deals and that he had not
been successful. I wrote McMurtry a number of
times and got very few letters in reply. They are
in my attorney's possession.

Q. I invite your attention to a check numbered
114, which is dated New York, September 23, 1910,
drawTn on the Second National Bank of the City of
New York, by F. H. Searls, made payable to the
order of William Mahr, do you remember of having
received a check similar to that one which was made
payable to your order and possibly bearing another
date and another number % [278 — 171] A. Yes, sir.
Q. From whom did you receive your check similar
in character to this one made to Mr. Mann, or Mr.
Mahr ? A. I did not exactly receive a check ; it was

California Midway Oil Company et al. 317

(Deposition of Edwin L. Powell.)
exhibited in my presence by M. Searls. Q. When
was it that Mr. Searls exhibited this check in your
presence ? A. It was not, I should say, until a month
or six weeks after I signed the ratification of the
power of attorney. Q. Do you remember the amount
of that check ? A. Yes, sir. Q. How much was it f
A. $250.00. Q. Did you add your name to that check
at any place? A. I did, I endorsed it on the back.
Q. Look at the check of Mr. Mahr ; I find upon the
back of it in typewriting, the following language :

■ 'Received from L. B. McMurtry, $250.00 in
full payment for all my right, title and interest
in and to all lands located by said L. B. McMur-
try, on my behalf, in Kern County, California,
pursuant to a power of attorney made by myself
and others to said L. B. McMurtry, bearing date
the 19th day of December, 1907."
Was there a similar receipt or conveyance or simi-
lar language upon the back of the check? A. I be-
lieve so. Q. Which you signed? A. I believe so.
Q. Did you sign your name immediately under it?
A. I believe I did.

Received $250.00 in cash at the time I signed that
check.

Q. Did Mr. Searls tell you wThy he was giving you
this check for $250.00? A. He explained to me that
that was part of the proceeds of some minor deal
which Mr. McMurtry had out through in California
and that a like amount was being distributed to each
of the other locators.

I read the typewriting on the back of the check

318 The United States of America vs.

(Deposition of Edwin L. Powell.)
before signing. Did not know how many claims
McMurtry had located under this power of attorney
at that time. No definite report wTas made to me at
that time as to the condition of affairs with respect
to those oil lands everything was always very vague,
no detailed [279 — 172] report at any time was
made to me, by Searls or anyone else. Was in New
York frequently after signing the check and would
telephone or drop in to see Searls and inquire con-
cerning these oil lands. He was always optimistic
and hopeful but gave no definite information.

Q. Have you any information with respect to the
stage of the negotiations contemplated by the con-
tract of August 4, 1910, between Mr. McMurtry and
Herrin and others ? A. No, sir. Q. Did you know
or wrere you advised as to whether or not that con-
tract had been finally executed? A. I was advised
that it had not been. Q. Who advised you that it
had not been? A. Mr, Searls. Q. Had you heard
of any other contracts that were contemplated or had
been executed with respect to these lands at the time
you signed the check for $250? A. No definite con-
tract, except that I was told that Mr. McMurtry had
made one small deal wThich had netted a small amount,
enough to make this division possible. Q. Did you
know what deal that was, or the lands it affected?
A. No, sir, and never had any definite information
in regard to any of the transactions.

In the fall of 1911, I received in New York from
McMurtry a certificate for 1000 shares of Pacific Oil
Lands Company stock. Met McMurtry personally

California Midway Oil Company et ah 319

(Deposition of Edwin L. Powell.)
at that time at the Knickerbocker Hotel. He then
said that he had organized the Pacific Oil Lands Com-
pany and had turned all these lands, had transferred
all these lands to the Pacific Oil Lands Company, to
facilitate the handling of them, to facilitate deals,
wThich he might, which might be made concerning
them. I did not know at that time whether or not the
contract of August 4, 1910, with Herrin and others,
had been consummated. Do not recall that I ever
heard of any contracts between McMurtry and Mrs.
J. M. McLeod with respect to those lands. [280 —
173] except wThat I remember hearing in court in
California, during the progress of the trial in w7hich
I testified in November, 1916. I met McLeod at that
time. I might have heard his name mentioned by
either Mr. McMurtry or Mr. Searls, but it made no
impression on me than the hearing of any other name.
Q. At the time you received the certificate of
stock of the Pacific Oil Lands Company, which is
certificate No. 19, and I now present it to you as it
is attached in the original stock book of the Pacific
Oil Lands Company, did you knowT of the execution
of any contracts between Mr. McMurtry and Herrin
and others, or between Mr. McMurtry and Mrs.
J. M. McLeod and others? A. No, sir. This cer-
tificate No. 19 is the certificate I received from Mc-
Murtry in the fall of 1911, at the Knickerbocker
Hotel in NewT York. The receipt wThich is pasted
upon the stub of certificate No. 19, which reads as
follows: " Received certificate No. 19, for 1000
shares of Pacific Oil Lands Company, dated Sep-

320 The United States of America vs.

(Deposition of Edwin L. Powell.)
tember 12, 1911," bears my signature. I was asked
to sign this receipt by McMurtry. He did not ex-
plain why he wanted me to sign it.

Q. I invite your attention now to a receipt or
rather the following language upon the back of cer-
tificate No. 19, to wit:

"For value received, I hereby sell, assign and

transfer until Walter S. Brann shares

of the capital stock represented by the within
certificate, and I do hereby [281 — 174] ir-
revocably constitute and appoint Walter S.
Brann to transfer the said stock on the books
of the within named corporation, with full
power of substitution in the premises. Dated
March 14, 1914. Signed, Edwin L. Powell.
In the presence of this day of

Is that your signature to that (showing witness) ?
A. That is my signature, yes, sir. Q. When did
you sign that, Mr. Powell? A. On the date indi-
cated. Searls requested me to sign that in New
York, I believe.

Q. What was the conversation that occurred
between you and Mr. Searls at the time he re-
quested you to sign that transfer? A. Mr. Searls
told me that the affairs of the Pacific Oil Lands
Company were not progressing satisfactorily; that
the stock was practically valueless, but that Mr.
McMurtry had authorized him to give me $250 for
it. Q. What did you receive, if anything, of value,
when you signed your name to this transfer, to

California Midway Oil Company et al. 321

(Deposition of Edwin L. Powell.)
certificate No. 19? A. I received $250 in cash.
Q. Since that date have you ever received anything
of value on account of the fact that your name
appears upon any oil land locations in the State
of California? A. No, sir. Q. At the time you
signed this transfer on the back of the certificate
on March 14, 1914, what did you do with the cer-
tificate? A. I delivered it to Mr. Searls. Q. Since
the time you delivered the certificate to Mr. Searls,
have you received anything of value on account of
your name appearing as a locator upon any oil
lands in California? A. No, sir. Q. At the time
you delivered certificate No. 19 to Mr. Searls, did
you know who was in possession of any lands upon
which you appeared as a locator in the State of
California? A. No, sir. Q. Did you know at the
time you surrendered that certificate, anything as
to the condition of the lands upon which your name
appeared as locator? A. No, sir. Q. Did you
knowT the condition, [282 — 175] the financial con-
dition, of the Pacific Oil Lands Company at that
time? A. No, sir. Q. Did you know what the
assets and resources of that company wTas or were
at the time? When you delivered or surrendered
certificate No. 19. A. No, sir. Q. Did you know
how many locations of public oil lands had been
made upon w7hich your name appeared as a locator
or colocator at the time you surrendered this certifi-
cate? A. No. Q. At the time you surrendered
certificate No. 19, had you made inquiry, any in-
quiry as to the number of claims upon which your

322 The United States of America vs.

(Deposition of Edwin L. Powell.)
name appeared as a locator? A. I do not — I never
asked that specific question of anybody, no, sir.
Q. Did you at the time you surrendered certificate
No. 19, had you ever inquired of any person as
to the condition or state of development of any
of the lands upon which your name appeared as
a locator? A. No. At the time you surrendered
certificate No. 19, had you ever inquired of any-
body wrho was in possession of the lands upon which
your name appeared as a locator? A. No, sir.
Q. At the time you surrendered certificate No. 19,
had you inquired of any person as to the financial
condition and resources of the Pacific Oil Lands
Company? A. No, sir, except that I made general
inquiry of Mr. McMurtry and Mr. S earls and Mr.
Thorn on every possible occasion as to how matters
were progressing in regard to these lands. Q.
What would they tell you when you inquired?
A. I never could get any definite information;
sometimes the information that I got was opti-
mistic, that there were great possibilities, and the
next time it was very pessimistic, the bottom had
dropped out of everything; I could never get any;
definite information from anybody. Q. At the time
you received certificate No. 19, did you read it?
A. Yes, sir. Q. Did you know at that time what
the capital stock of the Pacific Oil Lands Company
was? A. I probably did. Q. At the time you re-
ceived [283—176] Certificate No. 19, did you
knowT who were the stockholders in the Pacific Oil
Lands Company? A. No, sir. Q. Did you know

California Midway Oil Company et ah 323

(Deposition of Edwin L. Powell.)
how many shares Mr. L. B. McMurtry owned in
the company at that time? A. No, sir. Q. Did
you know how many shares of stock Mr. E. A.
Hoeppner owned in the Pacific Oil Lands Com-
pany? A. No, sir. Q. Did you know how many
shares of stock either one of those gentlemen owned
at the date you surrendered certificate No. 19 to
Mr. Searles? A. No, sir. Q. At the date you
surrendered certificate No. 19, did you know wThat
had become of the title and right to possession of
the lands upon which you appeared as a locator in
the State of California? A. No, sir. Q. Did you
make any inquiry of anybody at the time of sur-
rendering certificate No. 19, as to the title and right
of possession of those lands? A. I don't know that
I made any inquiry on just that way. I inquired
of Mr. Searls as to general conditions, but not any
specific inquiry of that sort.

(Proxy dated August 15, 1913, handed witness.)
That is my signature on that. Believe I re-
ceived it by mail probably sent to me by Mr.
Harrison, who wras connected wTith the Pacific Oil
Lands Company, I believe as secretary and treas-
urer. Don't remember whether a letter accom-
panied it or any advice that I received with respect
to that paper, and my execution of it. Probably
had some letter explaining the purport of it, but do
not remember that I did.

(Plaintiff's Exhibit 13 read into deposition. It
is a proxy similar in form to Plaintiff's Exhibit 5
with the deposition of Frank B. Chapman, and

324 The United States of America vs.

(Deposition of Edwin L. Powell.)

purports to have been executed by Edwin L. Powell,

August 15, 1913.) [284—177]

Probably returned that proxy to the person who
sent it to me. Did not at that time have any defi-
nite information as to the number of claims on
which I appeared as a locator in the State of Cali-
fornia, or as to the condition or state of develop-
ment of those claims.

Yes, that is my signature. (Plaintiff's Exhibit
14.) The paper first came into my possession
probably approximately at the time it is dated,
December 13, 1913; came by mail, I believe, from
Mr. Harrison. I read it before executing it, and
returned it to Mr. Harrison.

(Said exhibit offered and read in evidence as
Government's Exhibit 14 with the deposition, as is
as follows:)

(This exhibit is similar in form to Plaintiff's
Exhibit 6 with its deposition of Frank B. Chap-
man, and purports to have been signed by Edwin
L. Powell, December 13, 1913.) [285—178]

There was probably a letter with that paper.
If there is any such letter, it is in the hands of
Mr. McCormick. Do not recall that there was any
other writing or typewriting accompanying the
letter and paper. Probably a month later I re-
ceived from the Pacific Oil Lands Company a
check for $20.00.

Q. I invite your attention now to a check wThich
is, in substance, as follows:

California Midway Oil Company et al. 325

(Deposition of Edwin L. Powell.)

"San Francisco, 1/8/14. No. 1185.
THE BANK OF CALIFORNIA.
National Association, San Francisco.
Pay to the order of Edwin L. Powell, $20.00—
Twenty dollars.

PACIFIC OIL LANDS CO.
F. E. HARRISON,
Secy. & Treas.
L. B. McMURTRY,

Vice-Pres."
Is that check the check you received (showing
witness)? A. Yes, sir. Q. And that is your en-
dorsement on the back of the check, is it not,
Edwin L. Powell (showing witness) ? A. Yes, sir.
Q. What did you do with the check ? A. I put it
through my bank, as I remember it.

This check came by mail addressed in Mr.
Harrison's handwriting. There probably was a
letter with the check. It was probably a letter
explaining what the check was, probably explain-
ing that the check wras a distribution as a result
of my authorization, to my consent to the distribu-
tion. Don't knowr [286 — 179] where this letter
is. May be in the hands of Mr. McCormick. I
turned over to Mr. McCormick all the communica-
tions in regard to this matter that I had received.
Do not recall that there wras anything in this
envelope besides the check and letter from Mr.
Harrison, if there was such a letter.

Q. I invite your attention now to three type-
written sheets wilich bear the title, " Pacific Oil

32G 77/ r railed States of America vs.

(Deposition of Edwin L. Powell.)
Lands Company, First Report to Stockholders
and in pencil, in the upper right hand corner, ap-
pears, "Jan. 1914/ ' and in the upper left hand
corner, in pencil, the initials, "H. A.," and just
below that the initials "F. H." Please examine
those sheets of paper carefully, Mr. Powell (show-
ing witness).

Q. At the time you received the last check for
$20.00 to which we have referred, did you receive
this report or a copy of it? A. I believe not.

I do not believe I ever received a copy of it.
I believe the first time I ever saw it was in Cali-
fornia last November. Received this check for
$20.00 before I surrendered the certificate No. 19.

Q. I want to get as definite a statement as I can
from you in regard to the receipt of this Pacific
Oil Lands Company's report, and I may become
somewhat leading in my questions, but the burden
of that I will take myself. Do you now say that
you positively did not receive this report? A. I
say to the best of my recollection I did not receive
it, [287 — 180] but I cannot say positively that I
did not.

I may have, but I think it is very unlikely that
I did, because I have absolutely no recollection of
having received it. I am the person who appeared
as a witness for defendants November 20, 1918, in
case No. A-38, United States vs. Thirty-two Oil
Company, pending in the Northern Division of the
Southern District of California. Was then ex-

California Mid way Oil Company et al. 327

(Deposition of Edwin L. Powell.)

amined by Mr. Oscar Lawler, who appeared for

defendants there.

Q. I invite your attention now to the following
portion of your testimony which is found at pages
598 and 599, of the stenographer's transcript in
that case, as follows:

"Q. Can you recall the substance of any of these
conversations that took place — I presume they took
place at the office of the company usually, didn't
they'? A. Yes, sir. Q. In the latter part of the
year 1907 and prior to Mr. McMurtry 's leaving for
California? A. Mr. McMurtry had many times
talked with me and others in my presence in regard
to the probable value of oil lands in California,
aria1 he represented them, in his opinion, to be of
very great value, and he stated that it was his
opinion that there were in California valuable oil
lands or oil land which would probably become
valuable which would be subject to location —
Government lands. Q. Do you recall the occasion
\of the execution of a power of attorney authorizing
the location of oil lands? A. Yes, sir. Q. Will
you state as nearly as you can recall them the
circumstances under which that occurred and the
conversation that took place at or about that time
,with reference thereto? A. Mr. McMurtry ex-
plained something of the laws under which oil
lands might be located, and said that a certain
number of persons would be necessary to associate
themselves, in groups of eight, I believe, in order
to locate these Government lands, [288 — 181]

328 The United States of America vs.

(Deposition of Edwin L. Powell.)
after which location it was necessary to do certain
wTork in order to retain them and get title to them,
and we talked it over a good many times about the
possibilities of locating such lands, and in that way
making up for the hard times we had been through
and recouping our losses in this other proposition.
Q. That is, the losses sustained in the Empire
Company? A. Yes, sir." Do you remember of
having so testified before the Court in San Fran-
cisco on the date I have mentioned? A. Yes, sir.
Q. Mr. Powell, do you know when your name was
used [289 — 182] upon any location notice or first
appeared upon any location notice of the northeast
quarter of section 34, the northeast quarter of sec-
tion 20, the northeast quarter of section 22, or the
.northeast quarter of section 26, in township 31,
south, range 23, east, in Kern County, California?
A. No, sir. Q. The records of Kern County, Cali-
fornia, disclose that the lands I have just described
were located on January 1, 1909,- by Mr. McMurtry,
using your name and the names of seven others.
Prior to that time had you any communication or
dealings whatever with F. H. Denison, R. E. Price,
or Pierce, C. A. Converse, H. B. Rentschler, and
Jesse Cunningham, with respect to any rights that
they might have had in the lands I have specifically
described, prior to December 31, 1908? A. I never
heard of any of those persons; I never had any
dealings of any sort with them, and did not know,
that they existed.

Had no knowledge prior to December 31, 1908,

California Midway Oil Company et al. 329

(Deposition of Edwin L. Powell.)
as to the state of title or the right of possession with
respect to these northeast quarters of sections 34, 20,
22 and 26, and was not advised that these persons
whose names you have just called, F. H. Denison and
others, had been located upon these lands by McMur-
try under their power of attorney.

Cross-examination.
No, nothing was said in this conversation with
McMurtry about locating oil lands in California, as
to his wanting to use my name in order to locate the
lands for his benefit, or that he might acquire an in-
terest in them, nor did I make any such suggestion
in soliciting Taylor and Meinecke to sign, or suggest
that they should act as dummy locators for McMur-
try or anybody. No suggestion or intimation was
made to me by McMurtry that he [290—183]
wanted to use the names of thirty-two people, or
any people, so as to take up land in California for his
own benefit. This subject was never broached at any
time by McMurtry, Searls or any body on behalf of
Searls or McMurtry. No, these locations were not
to be made for the benefit of the Empire Company,
but for the individuals. We had been in an unsuc-
cessful venture together and we were naturally look-
ing for means of making some money. And Mr.
McMurtry suggested the location of oil lands in Cali-
fornia as a means to that end. Yes, I remember
during these conversations I was having with Mc-
Murtry in New York in 1911, which indicated that
he was in possession of the lands and was doing his
best to stay in possession of them, and something

330 The United States of America vs.

(Deposition of Edwin L. Powell.)
about having trouble in keeping off jumpers, but
had no personal, actual knowledge, or no definite or
specific information on those points. There were
always stories told by McMurtry and Searls of diffi-
culties and troubles and obstacles they met in the
way of executing contract which they had tried to
execute, and holding the lands the explanations were
made in such a way that I understood that Mr. Mc-
Murtry was pretty well occupied, pretty busy, in
looking after the properties. Yes, the low price of
oil at various times was given as one of the difficul-
ties they encountered in their operations out there
in regard to these lands, and something about the
land being withdrawn by the Government, which
would probably lead to litigation. At the time
McMurtry got me to sign this ratification (Exhibit
12) he told me it was a very delicate proposition and
there was considerable question as to whether it
would go through or not. Do not recall his calling
my attention to the fact that the Government had
attempted to withdraw these lands and that question
anight have to be met too. Cannot fix the time when
I first knew of that. At the time I [291—184]
signed this ratification I understood from McMur-
try 's explanation as to the matter that these con-
tracts were all prospective profits and that there was
simply a contract wThich would look to the develop-
ment of the lands and profit would come, if the land
proved to be valuable. There wTas no intention on
my part at any time to permit my name to be used
by McMurtry or anybody else in the matter of these

California Midway Oil Company et ah 331

(DepositioD of Edwin L. Powell.)
locations to cheat or defraud the Government in ob-
taining from the Government any greater acreage
of land than I or any other person would be entitled
to, and I know of no such intention on the part of
any of the thirty-two locators. Was not advised at
the time I signed these ratifications or at the time I
received the check for $250.00 or at the time I signed
the transfer of stock or any time prior thereto, that
McMurtry had received moneys from the Associated
Oil Company from any contracts.

When I saw Searls in Boston prior to going to
California, either 1912 or 1913, he told me that he
had been waiting until things progressed far enough
so that his services w7ould be needed out there, and he
said that Mr. McMurtry had sent for him and had
told him to come out to California, and that he had
packed and shipped his household goods, and that he
was then on his way to California, in a roundabout
wray, was going to stop off in Maine for a short visit
before he went out; he said the situation looked
promising out there, and looked like they would be
able to do something substantial as property deals
wrere pending.

At the time I turned over my stock Searls gave me
to understand and he told me that there were no pros-
pects of any further returns from the project; he
told me that the stock was practically valueless. The
withdrawal by the Government was one of the diffi-
culties. Nothing was said about McMurtry having
received any sum of money like $85,000, or $175,000,
or any [292 — 185] substantial sum at all. He

332 The United States of America vs.

(Deposition of Edwin L. Powell.)
said the lands were practically, the project wras
practically a failure, and he said the stock was not
really worth anything, but, in order to facilitate Mr.
McMurtry 's handling of the affairs from that point
on, to combat the troubles that were arising, that Mr.
McMurtry wanted the stock in his own hands, all of
it, and offered $250 for my 1000 shares. That if the
Government should proceed and take the land away
there would not be anything in this thing at all either
under the contract that was contemplated or in any
way. Yes, that was substantially w7hat he said. Mr.
Brann accompanied Mr. Searls on one of his trips to
Boston, and we three had breakfast together at the
Adama House in Boston. Cannot say whether that
was before or after the stock transaction. Did not
know7 that Mr. Brann had any interest whatever in
the transaction. He was introduced as a friend of
Searl's. Yes, on a number of occasions wThen I had
conversations with McMurtry, he said, " Leave the
matter with me," and when anything important had
been achieved we would all have a full report of it.
Yes, I understood that the matter wTould be handled
by leasing or giving awTay part of the lands that Mc-
Murtry could have the entire lands in the areas in
which he might locate for us developed, and give
actual value to the parts that were retained. No,
we were not absolved from the payment of assess-
ment wTork or charges for development. Yes, I gave
fhim full power to mortgage or sell or do with the
lands whatever, in his judgment, wTas best to bring
us financial returns. The subject of McMurtry's

California Mid /raj/ Oil Company et al. 333

(Deposition of Edwin L. Powell.)
compensation was never discussed. I understood
that McMurtry wras to be reimbursed for his work
and services. He was a practical man and wTas acting
as our agent and if any valuable properties were se-
cured by his actions as our attorney, he wTas to be
liberally compensated for his work and handling it
for us. That matter [293 — 186] wTas never dis-
cussed by me w7ith anybody else. It was wholly a
matter for the future. That was simply my under-
standing. At the time I signed this check for $250.00
with the endorsement on the back, I left it with Searls
and he gave me $250.00. He said that he would save
me the trouble of putting it through my bank, and
if I would endorse it he wTould cash it for me right
there.

Q. And that you received this money on the check
some time in 1910, which was a year or approxi-
mately a year before the organization of the Pacific
Oil Lands Company ? A. Yes, sir. Q. Can you ex-
plain to me, as you read this endorsement, how it
came that you endorsed it, and how it was that, not-
withstanding your endorsement in 1910, transferring
all your interest in these lands, pursuant to this check
to Mr. McMurtry, you afterwards in 1911 got 1,000
shares of stock and afterwards that was purchased
from you? In other words, why did you do this
at that time, and what was the occasion, and what
he said to you? A. I will explain it as it was ex-
plained to me. Q. Yes. A. I signed that, and I
told Mr. Searls I was apparently signing away my
birthright, and he said that was simply a matter of

334 The raited States of America vs.

(Deposition of Edwin L. Powell.)
form ; that that did not really change my status at
all in the matter in these lands or locations, and that
was simply a matter of form, and it was wanted to
facilitate negotiations, and I received the stock in
the oil lands company a year later. Q. I have either
missed part of your answer or I did not quite under-
stand it. Do you mean to say that at the time of
this check being presented to you by Mr. Searls, you
questioned with him the execution of the instrument
on the back of the check ? A. Yes, sir. Q. And that
he told you this was simply a matter of form and that
you still retained your interest in the locations ? A.
Yes, sir. Q. Did he give you a [294—187]
more specific reason, and by that I mean, did he
tell you why Mr. McMurtry, in giving you this $250
as a result of some returns from some of these
located lands, and giving the same amount of
money, as I understood you to say, to each and
every other locator, was asking for that kind of
document, did he say anything at all about its not
meaning what it said, that it might be error?
A. Yes, sir, that was the whole explanation; it was
alwTays given to him with the understanding that
it would facilitate the negotiations that were
pending, and he assured me the document did not
mean what it said. Q. In other words, you had
already given Mr. McMurtry your power of at-
torney to locate lands and sell them and do as he
pleased with them? A. Yes, sir. Q. And you
thought that you were executing a power of at-
torney in another sort of form by reason of what

California Midway Oil Company et al. 335

(Deposition of Edwin L. Powell.)
Mr. Searls said? Q. Was that what Mr. Searls
said to you, in substance and effect? A. Yes, sir.
Q. But you cannot recall the language of what he
said? A. No, sir. Q. After you got this check,
which was in 1910, Mr. Searls was in and about
New York, you in Massachusetts, until at least
1912, and 1913, when he went to California? A.
Yes, sir. Q. Did your correspondence concerning
this land with Mr. Searls occur after you had re-
ceived this check and this money? A. Yes, sir.
Q. Did he ever say to you, or did Mr. McMurtry
ever say to you, afterwards, that you were simply
being treated liberally and without any legal rights
in the matter, when you asked him the question?
A. No, sir.

Eedirect Examination.
Q. When you had this understanding with Mr.
Searls, about the signing of the check for $250,
in 1910, is it not a fact that you understood that
you were placing the title and right of [294^ —
188] possession to these lands in Mr. McMurtry 's
hands so that he could do with them and deal wdth
them as he thought best? A. Not for his personal
benefit, no, sir. Q. No, but I don't mean that; I
mean so that he could transfer the lease or negotiate
or have developed these lands, as he thought best?
A. He always had that right from the very first,
from the time we gave him the power of attorney
and ratification of it. Q. And you understood that
he could handle these lands in any way that he saw
fit? A. Yes, sir, but I also understood that he wTas

336 The United States of America vs.

( Deposition of Edwin L. Powell.)
to report to us — Q. Did you not understand that
Mr. McMurtry had full right after you signed this
check, to sell or convey or lease or develop these
oil lands to third parties without further convey-
ance or consent from you and your colocators?
A. Yes, sir, just the same rights as he had before
I signed the check. Q. Mr. Ach asked you in re-
gard to some testimony at page 637 of the record,
and I read previous thereto as follows:

rfQ. But your willingness to help out extended
to Mr. J. B. Thickens? A. Yes, sir. Q. You
wanted to see him reimbursed for the loss he had
sustained in the Empire Oil & Development Com-
pany? A. Yes, sir, I was willing to. Q. And it
was with that idea in mind that you executed this
power of attorney to Mr. McMurtry? A. Yes, sir.
Q. And it was your understanding at that time,
was it not, that Mr. McMurtry was to have what-
ever benefit might be flowing to him out of the
making of these locations? A. I didn't understand
that the locations were to be made for Mr. Mc-
Murtry 's benefit; no, sir. Q. Did you understand
that Mr. McMurtry was to be benefited by reason
of the making of the locations? A. In a general
way. He was acting for us, and I expected and
understood that he would be reimbursed for his
services as our agent.' ' [295 — 189] Did you so
testify in the hearing of A-38? A. I so testified.

Never met Major E. A. Hoeppner and never
consented that he should derive any benefit out of

California Midway Oil Company et ah 337

(Deposition of Edwin L. Powell.)

the lands located by McMurtry under my power of

attorney, nor was I asked to.

Q. In response to Mr. Ach's question, you said
at the conference between yourself and Mr. Mc-
Murtry in Boston, when you executed the ratifica-
tion, that Mr. McMurtry told you it was problem-
atical as to whether or not certain contracts might
be carried out. What contracts did you there refer
to? A. The contracts referred to hinted at in the
ratification that he asked me to sign.

Since delivering this certificate No. 19 to S earls,
do not know whether I have any interest in the
company or not, that is a question I have not been
able to decide in my own mind. Have not partici-
pated as a stockholder in any corporate business
of the company. This transfer on the back of
certificate No. 19 was signed in blank. There was
no transferee named.

Q. At the time you signed the name "Edwin L.
Powell" to the transfer on the back of certificate
No. 19, to whom did you intend to transfer your
shares of stock in the Pacific Oil Lands Company?
A. I did not know definitely wrho was to actually
own the stock after I turned it over to Mr. Searls.
Mr. Searls said that Mr. McMurtry had authorized
him to give me $250 for the stock, but nothing was
said as to who was to own the stock after I turned
it over to him.

Did not ask Mr. Searls who was to own the stock.
Have not received anything of value since I sur-
rendered this certificate No. 19 to Searls. [296 —
190]

338 The Umted Slates of America vs.

Deposition of George W. Berry, for Plaintiff.

GEORGE W. BERRY, called April 19, 1917,
on behalf of the plaintiff, testified by deposition
as follows:

Reside at 91 Ferguson Street, Corona, New York
City. Estimator, in the printing business. Lived
in Corona in December, 1907. Place of business
was No. 9 Murray Street. Knew L. B. McMurtry
a good while before that. Met him through Mr.
F. H. Searls, whom I had known probably fifteen
or twenty years. He was my employer at one time
in the printing business. I owned some stock in
the Empire Oil and Development Company. Can-
not say how much. It was given me as a bonus
on notes that I held of Mr. McMurtry 's for money
that I had loaned him. McMurtry owed me money
in December, 1907.

Q. The records of Kern County, California, dis-
close that there is recorded therein a power of
attorney (substance of Plaintiff's Exhibit 5 stated).

Are you the George W. Berry who executed that
instrument? A. I did.

Have forgotten any conversation in regard to the
matter, but remember it was taken up with me and
I think Mr. Searls first spoke of it.

Q. Why did you sign it? A. Because I expected
to gain something from the powers that Mr. Mc-
Murtry had as a developer of the land.

Expected to gain something in a monetary way.
From development of the property and afterwards
sale, and whatever other method wrould bring out

California Midway Oil Company et ah 339

(Deposition of George W. Berry.)
profit. Imagine Mr. Searls told me about this.
He was my prompter in all these acts; I didn't
know an awful lot about Mr. McMurtry, except I
had met him [297 — 191] several times. Had no
knowledge of mining laws ; in fact, I have none yet.
Depended upon Searls for advice and information
on this power of attorney and the transactions
growing out of it. Don't know when I next heard
about it. I was occasionally writing to Mr. Searls
and he usually said something about them.
Remember signing several papers afterward, but
cannot remember what they were.

Q. Mr. Berry, I invite your attention to check
No. 121, dated New York, September 30, 1910,
drawn on the Second National Bank of the City
of New York, by F. H. Searls, payable to the order
of George W. Berry, for the sum of $250. On the
back of that check is the following in typewriting:
" Received from L. B. McMurtry, $250.00 in
full payment for all my right, title and interest
in and to all lands located by said L. B. Mc-
Murtry, on my behalf in Kern County, Cali-
fornia, pursuant to the power of attorney made
by myself and others to L. B. McMurtry, bear-
ing date the 21st day of December, 1907."
That is signed, " George W. Berry." Is that
your signature to that check on the back thereof
(showing witness)? A. Yes, sir, it is.

That check must have been given to me person-
ally by Searls. Don't remember reading the type-
writing on the back, but it must have been there.

340 The United States of America vs.

(Deposition of George W. Berry.)
Don't remember whether I read it at the time.
Did not pay the check through any bank. Think
I simply endorsed it and handed it back to S earls
and he gave me cash for it. Don't know why this
was done. Suppose there was some conversation
at the time, but these things are so vague in my
mind that I don't remember what was said about
it, or just exactly what it was for. Don't remember
what the next paper was [298 — 192] that I
signed.

(Government's Exhibit 14 showTn witness.)
Q. Please examine it and tell me whether or not
that is your signature on the paper. A. Yes, I
signed that.

Don't remember who presented it to me. I think
it was at the Waldorf, but am not certain. Am
not certain if that was the time Mr. Thorn and
Mr. McMurtry were present. Don't remember
what wTas said to me only that I was to agree to
it — to give Mr. McMurtry the right to do what he
could with the land, that he was prospecting on.
That is the only reason I knew. I was not well
acquainted with those oil land methods. I knew
that something had to be done to make it profitable
and that was the only thing I knew about it. Most
of the information I got was from Searls. When
I was employed by him he was talking pretty much
all the time about this business and occasionally I
wTould meet him, if that was wThen he was in New
York here, and I met him on a number of occasions.
Don't know who advised me of the necessity for

California Mid way Oil Company et ah 341

(Deposition of George W. Berry.)

signing Exhibit 14. I must have read it; I don't

"usually sign things without reading them.

Q. You will notice that there is in this paper the
following :

"And I do hereby ratify, approve and con-
firm those certain contracts of sale made for
me and in my name by L. B. McMurtry as my
said attorney in fact with W. F. Herrin, et al.,
of date the 4th day of August, 1910."
Was there anything said to you about this con-
tract of August 4, 1910? A. Not that I remember.
Q. Did you know at the time you signed the rati-
fication— A. You call this the ratification? Q.
That is the ratification, Exhibit 14 — about the con-
tents or the purport of this contract of August 4,
1910? A. Why, I [299—193] know there was
some conversation, probably a half or three-quarter
of an hour's conversation before I signed this, and
I don't remember what it was all about just now.
These things slip your memory, you know. What-
ever it was, it must have been something I agreed
to, or I would not have signed it.

Remember receiving a letter from Searls at one
time in which he made statements about different
localities that McMurtry was locating. Don't think
he said the number of them, only that there was
something said about several, or more than one
anyway. Don't know whether this letter was re-
ceived before or after this ratification. Have a
faint recollection of seeing a map or sketch or
drawing of some kind in which there were some

342 The United States of America vs.

(Deposition of George W. Berry.)
peculiarly shaped tracts that were laid out, and I
think that must have been in the hands of Mr.
S earls, and whether there was one or a dozen on
that, I don't know, but I remember there was at
least one. I have in mind the figure of 1400 acres.
I may be wrong on that, but that seems to be the
figure that I have in mind. I know there was a
small quantity of something like forty acres, and
I think that was the one I was interested in, some
similar amount. This thing is very vague to me
and after a lapse of a good many years, you lose
practically all of that in fact, after you have thrown
the thing aside as being something of the past, you
forget these things.

There was so much told me by Mr. Searls about
different tracts it is all a muddle to me. I remem-
ber that one piece of property was located a far
distance from another, from the way he spoke.

(Plaintiff's Exhibit 14 offered in evidence in con-
nection with the deposition, and is as follows:)
[300—194]

(This is a ratification similar in form to Plain-
tiff's Exhibit 1 with the deposition of Frank B.
Chapman and purports to have been executed by
George W. Berry, August 15, 1910.) [301—195]

Cannot say whether check 121 was received be-
fore or after signing Exhibit 14. Certificate No. 32
of the Pacific Oil Lands Company, for 1,000 shares
stock, was received by me and the receipt attached
thereto, dated September 18, 1911, bears my sig-
nature. This certificate was received from Searls

California Midway Oil Company et ah 343

(Deposition of George W. Berry.)

personally, I think at No. 9 Murray Street. I don't

remember what conversation took place.

Q. Do you know why Searls gave you this certi-
ficate of stock in the Pacific Oil Lands Company?
A. Yes. beause there was considerable interest due
me on my note, and, as I understood it, Mr. Mc-
Murtry owned property on which he had a right to
hand me that as part payment of some of the inter-
est he owed me on my note, which I never received
fully. Q. You say Mr. McMurtry owned the prop-
erty? A. Pacific Oil Lands Company, that is, Mr.
Searls used to speak of them as "Mack's property/'
What that meant, I don't know. I suppose, though,
because he was interested in it more than some other
lands; I don't know. Q. Did you give Mr. Searls
anything of value for this certificate No. 32? A. No
except the owing of interest on my notes. Q. Notes
from whom? A. From Mr. McMurtry; and when
this Empire Company went to pieces, why, I was
handed some of that stock, and I think that wras the
stock. Q. I invite your attention now to the back
of this certificate and the reading thereon, or rather
the writing thereon is as follows:

"For value received, I hereby sell, assign and

transfer unto Walter S. Brann shares

of the capital stock represented by the within
certificate, and do hereby irrevocably constitute
and appoint Walter S. Brann to transfer the
said stock on the books of the within named
corporation, with full power of substitution in
[302 — 196] the premises.

;»l 1 The United States of America vs.

(Deposition of George W. Berry.)

Dated , 19—.

In the presence of

(Signed) GEORGE W. BERRY."
Is that your signature to that (showing witness) ?
A. Yes, sir, it is. Q. Do you remember when you
put that on there? A. Oh, when Mr. Searls — really,
when he came to me about it and asked me to bring
the stock over one day I remember be brought —
or rather then I signed that. I think that was the
time. Q. What did you do with the certificate at
the time you signed it? A. Gave it to him, but I
have no recollection of those names at all; I don't
know this man. Q. You don't know Walter S.
Brann? A. No. My dealings in that were with
Mr. Searls.

Don't know how long I kept that certificate.
Received $250 in cash when I surrendered it to
Searls. (Witness identifies signature on Plaintiff's
Exhibit 15.) Don't remember who presented that
to me, nor do I remember executing it.

Q. Will you read the paper and see if that re-
freshes your memory any, Mr. Berry? A. I donTt
remember that. I may be muddled up on some of
these papers. If I knew just wrhere that was, when
I signed that, it might recall to my mind. I think
I have got several of these papers rather muddled
up in my mind as to where it was they were signed.
Q. I see the notary adds to his certificate in rubber
stamp, "Notary Public, Westchester County, Certi-
ficate filed in New York County." Does that recall

California Midway Oil Company et ah 345

(Deposition of George W. Berry.)
anything to your mind? A. Why, let me think
now. No, it does not. I was trying to think of
another document I signed, but had no connection
with this at all, which was in Westchester County,
but it was in relation to a deed. I cannot place
that. It is my signature. I must have signed it,
but I cannot recall where it was signed. If I could,
I might recall the incident. Q. Can you tell me
now why you signed this instrument marked Gov-
ernment's [303—197] Exhibit 15? A. Why, I
must have been willing to give him these powers.

(Plaintiff's Exhibit 15 read into the deposition.
It is a proxy similar in form to Plaintiff's Exhibit
5 w7ith the deposition of Prank B. Chayman arid
purports to have been executed by George W.
Berry, August 12th, 1913.) [304—198]

I remember this. (Plaintiff's Exhibit 16.)
Think it came to me through the mails with a letter
signed Harrison. Must have returned it to Har-
rison. I still have the letter which accompanied it.

(Plaintiff's Exhibit 16 read into the deposition.
This is a consent to dividend similar in form to
Plaintiff's Exhibt 6 with the deposition of Frank
B. Chapman and purports to have been signed by
Geo. W. Berry, December 10, 1913.) [305—199]

After signing Exhibit 16, received a check for
$20.00.

Q. I now invite your attention to a check, to this
check, wThich purports to be dated San Francisco,
1/8/14, No. 1195, drawn on the Bank of California,
San Francisco, and made payable to the order of

346 The United States of America vs.

(Deposition of George W. Berry.)
George W. Berry, for $20.00. That is signed,
"Pacific Oil Lands Company, by F. E. Harrison,
Secretary and Treasurer; L. B. McMurtry, Vice
President"; and on the back is endorsed, among
other endorsements, "Geo. W. Berry." Is that the
check, or does that represent the money you got
(showing witness) f A. That represents the money
with my name on it, and it must be the check.

Think I received it with a letter. Think the letter
says why it wTas sent to me. I have forgotten what
it was now. At the time I surrendered this Certifi-
cate No. 32 for stock in the Pacific Oil Lands Com-
pany to Searls, did not know how many claims had
been located by McMurtry under the power of
attorney of December, 1907, on which my name
appeared. 'Did not knowT there was more than one.
Thought I only had one, the right to one claim; I
didn 't know there was anything else. At the time I
surrendered the certificate 32 to Searls, did not know
what rights I had in any land that had been located
under the power of attorney in my name. I cannot
see how I would know. Did not know how many
locations had been made in my name or how many
acres of the public domain were embraced in the lo-
cations. Made no inquiries as to the number of
claims or acres filed on [306 — 200] in my name.
Did not know who the stockholders in the Pacific Oil
Lands Company were, or the extent to which McMur-
try was a stockholder at the time I surrendered cer-
tificate 32 to Searls. Did not know to wThat extent
Major E. A. Hoeppner was a stockholder or what

California Midway Oil Company et al. 347

(Deposition of George W. Berry.)
the assets and resources of the company were nor had
I heard anything about the contract of August 4,
1910, between McMurtry, Herrin and others. Can-
not fix the dates at all, but between the times of the
signing of the power of attorney in December, 1907,
and to-day, I have heard on several occasions that
they were drilling wells and expected oil from them
on lands located under the power. Got this informa-
tion from S earls but cannot say when. It must have
been before the surrender of certificate 32, to Searls.
Q. I now invite your attention to a paper, or three
sheets of typewritten matter which is headed,
"Pacific Oil Lands Company, First Report to Stock-
holders," and in pencil, in the upper right-hand
corner, "Jan. 1914," and in the upper left-hand cor-
ner, the initials "H. A." and "P. H."; will you
please examine that (showing witness) ? A. I have
seen a paper similar to that before. Q. Do you re-
member where you received it from, or when you saw
it? A. Why, I know I received it at home. Now,
just when that was — Q. Was it before or after you
surrendered your certificate No. 32 in the Pacific Oil
Lands Company? A. Why, I cannot say that of a
surety, but I know I can place it within six years,
and that is the nearest I can come to it. Q. With
reference to the check for $20, dated January 8, 1914,
can you fix any time when you received this report
from the Pacific Oil Lands Company? A. As to
whether it was before or after? Q. Yes. A. No, I
cannot say whether it was before or after, but I
imagine it was not very far distant from it, Q.

348 The Uwited States of America vs.

(Deposition of George W. Berry.)
When you signed the original power of [307 — 201]
attorney in December, 1907, what was your under-
standing as to the liability, if any, you were incurr-
ing by signing that paper ? A. How do you mean
legal liability? Is that the intention? Q. I mean
the liability that you might incur for the develop-
ment of any oil lands? A. Well, I guess whatever
liability wTould occur in any business proceedings.
Q. Was there anything said to you about what your
liabilities might be? A. No; but I think from my
business experience a man is liable at any time for
his acts along those lines in a business way. Q.
What representations were made to you, if any, by
anyone, as to what liability you might incur by sign-
ing that paper ? A. I don't think there was any. Q.
Was there any suggestion made to you by anyone
as to what expenses you might be put to by reason
of 'your signing this paper? A. No.

This question wras not mentioned by Searls.
McMurtry's liability to me at the time of the execu-
tion of this power of attorney in December, 1907,
was somewhat around $1500 and $2000.

Q. Had McMurtry satisfied this obligation? A.
Yes, sir.

Cross-examination.

In December, 1907, held McMurtry's note for some-
where around $1,500 and $2,000, including interest.
Do not remember the date of the note. Had Empire
Oil and Development Company stock as security.
He paid me the principal and some interest, and the
remainder in Columbus stock. The settlement on be-

California Midway Oil Company et al. 349

(Deposition of George W. Berry.)
half of McMurtry was made by Searls in person.
The indebtedness was an old one as evidenced by a
note which had been renewed from time [308 — 202]
to time prior to December, 1907. Don't think it was
renewed after 1907. Had known McMurtry not less
than five years when I signed this original power of
attorney, and was well acquainted and friendly with
Searls, as I am now\ At the time of signing this
power, believed in the integrity of Searls and had no
reason to doubt his honesty and purpose. Searls and
I had frequently spoken to McMurtry with regard
to his business experience and mining experiences,
and they told me that they thought McMurtry knew
or could find some unoccupied Government land in
California, wrhich would be open to location and wrhich
might be valuable for oil, and that McMurtry was
going to California to attempt to find such lands.
Yes, at the time I expected this power of attorney
in 1907, I realized that the Empire Oil and Develop-
ment Company stock that I held wras valueless.

Q. What is the fact as to wThether Mr. Searls
said to you that Mr. McMurtry wTas anxious to lo-
cate lands, oil lands, in California, for people to
whom he w7as obligated, and for people who had lost
money in the Empire Land Company, or the Oil and
Land Company, in order that he might repay his
obligation, and give them an opportunity to make
money ? A. What is that question again, please.
Q. (Question read.) A. Yes, Mr. Searls made that
statement. No, Mr. Searls never asked me to lend
him money to assist him or McMurtry to perpetrate

350 The United States of America vs.

(Deposition of George W. Berry.)
a fraud upon the Government, nor did McMurtry,
Searls or any other person could get more mining
land than entitled to. No, Mr. Searls did not ask me
to give McMurtry this power of attorney nor to lend
McMurtry my money so that he could locate land
for himself. Yes, I gave that power of attorney to
McMurtry in good faith. I remember going to the
Waldorf Astoria Hotel in New York and signing that
ratification. [309 — 203] Remember Thorn was
there and someone else. Am not certain that it was
McMurtry. Yes, knew at the time I signed this rati-
fication that McMurtry had taken action under the
power of attorney that I had given him and that he
was representing that he had made contracts with
Herrin and others of date August 4, 1910, which were
contracts of sale concerning the lands located for me
&nd other people. Nobody at that time said any-
thing to me about my being only a nominal holder be-
cause the lands belonged to McMurtry or Searls, nor
did I ever say any such thing to anybody.

Q. Now, as I have read this thing to you, and
drawn the matter to your attention, you did know at
least by August 15th that contracts had been made
for you on your behalf by your attorney in fact that
you were ratifying those contracts, didn't you? A.
Yes, sir. Q. Now, does this refresh your memory,
that Thorn, or McMurtry or anybody else was
present, whoever it might have been, said to you that
it was necessary to have these ratifications, because
the Attorney of Mr. Herrin, who was acting for the
Associated Oil Company, or Mr. Herrin and the

California Midway Oil Company < ( al. 351

(Deposition of George W. Berry.)
other people, demanded proof that the principals
were alive and Mr. McMurtry was authorized to go
on and sell these lands, or their rights in these lands ;
do you remember that'? 'A. Well, of course, there
was a conversation at that time in regard to this
matter in which I signed it agreeable with that con-
versation, and that the exact wording, or rather the
inference, I don't remember now, but I know it
agreed with that which I read over several times be-
fore I signed it.

Yes, I know that whatever was said I was told
it was necessary that my signature should be attached
to that document, and am satisfied that I knew at
that time that land had been located in my name, con-
tracts had been made concerning the same [310 —
204] and that I was interested in the lands. No,
I had not myself conveyed any interest in these loca-
tions to anybody else. Yes, when Searls gave me
this $250 for the check he gave me some reason, but
exactly what it was I don't remember. It had some-
thing to do with oil lands. Suppose I read the matter
appearing above my signature in receipt for this
$250. Searls gave me some reason for that writing,
but I don't remember now what it was. Yes, re-
member Searls wrote me something about others try-
ing to enter the property and a necessity for keeping
jumpers off, but I didn't exactly know what was
meant by the term jumpers.

Q. Now, I refer you to the paper, dated the 12th
day of August, 1913 * * *

(Contents of Plaintiff's Exhibit 15 recited.) A.

352 The United States of America vs.

(Deposition of George W. Berry.)

I must have signed it, but I really do not remember

that paper.

This certificate No. 32 for 1000 shares of stock in
the Pacific Oil Lands Company, my receipt for which
is dated September 18, 1911, was received from Searls
in person, to w7hom the receipt was given.

Q. And Mr. Searls, wrhen he gave you that stock,
did he tell you wThat had become of your interest in
the contract which you ratified, or what had become
of your interest in the locator's lands for yourself'?
Didn't he tell you that it had all been put into this
corporation so as to handle it better? A. No.

I am sure of that. No, he didn't tell me that each
of the thirty-twTo locators was receiving 1000 shares
of stock. He then said the stock was valuable but
not how valuable, or how much it is worth per share
nor did I ask him. He said it was valuable and that
I should take it for granted that it was. No, I don't
knowT how many shares of stock the company has or
[311 — 205] what percentage of the total number of
authorized shares of capital stock 1,000 shares is, or
was. I probably did question that at, one time, but
I don't know wThat the answer was. Did not ask at
that time how many shares of capital stock the com-
pany had issued. Don't remember the gist of con-
versation at that time. I knowT I never met him but
what we didn't have an hour's conversation. In fact,
he would go over the affairs of these different com-
panies and I got more or less muddled with him, so
many names one wTas as much like the other as two
peas, and of course I didn't understand it in a busi-

California Midway Oil Company et al. 353

(Deposition of George W. Berry.)
ness way. Nothing was said at that time ahout the
fact that the Government had withdrawn the land
and that if the Government succeeded in recovering
the lands the company would not have anything at all.
But I know that I did receive from Searls letters to
the effect that there was some trouble with the Gov-
ernment. But whether it wTas previous to that or not,
that I cannot answer. Think I got this Columbus
Midway stock after I surrendered the Pacific Oil
Lands Company stock to Searls. No, Mr. Searls
did not tell me at the time I returned this 1,000 shares
of Pacific Oil Lands Company stock brought to me,
and received the $9250, that I could take my choice
of "either selling this stock for $250, or holding onto
it and take a chance on what its value would be ; that
the Government was trying to recover these lands,
trying to recover upon the contracts owned by the
Pacific Oil Lands Company, and if the Government
won, the stock would not be worth anything at all?"
He told me nothing about that. He asked me if I
would take $250 for it, and I told him yes. Yes, I
read that report of the Pacific Oil Lands Company
of January, 1914, but naturally forget what the im-
port of it is.

Q. And you did have some information as to the
acreage of [312 — 206] twenty-eight hundred acres
contained in this report ? A. Yes, sir. Q. And you
did have some information as to what was done with
the land in order to work it up, didn't you ? A. Yes,
sir. Yes, I was advised, whatever there was in the
report at the time I read it. Don't know that I

354 The United States of America vs.

(Deposition of George W. Berry.)
knew that trouble with the Government existed at
the time I surrendered this stock to Searls for $250.
That was not the reason that I took $250 without
debating the matter. I had left everything to Searls
and McMurtry. Mr. Searls was my friend, and I
considered that he would look after my interests
and I considered Mr. McMurtry was a man of honor
and I respected him myself. Had no reason for
thinking that McMurtry would take the interest
which I had in the located oil lands, and I never
knowingly gave him permission to do it. At the
time Searls offered me $250, for the stock did not
advise with him as to whether it would be a good
thing to keep it or let them go at that price. Am
sure about that. Considered that I had a right to
sell it at any price I chose.

Q. Now, didn't you know as a matter of fact, after
reading that report, that those 1,000 shares of stock
in this company were given to you, and represented
your interest in those located lands? A. In the
located lands of that Pacific Oil Lands Company?
Q. Yes, exactly. A. But, as I understand, there are
several locations which I did not seem to know any-
thing about. The other one, of course, when I held
those shares, I wTas holding a certain amount in that
particular locality. No, I did not think this 1,000
shares was given to me as part payment of the note
or interest on the note that McMurtry owed me.
The Columbus Oil Lands Company was.

Q. Is it a fact that when you are reported as say-
ing in reference to the interest on your note, " Mack's

California Midway Oil Company et al. 355

(Deposition of George W. Berry.)
property" that [313 — 207] you were referring to
the Columbus Midway property and stock, and not
to the property or stock of the Pacific Oil Lands
Company, referred to in the report from which I
have just interrogated you, as a locators' property?
A. That may be possible, because there are different
names, and there are three different companies
there, and all more or less all muddled up to me,
and it is possible it may have been mixed a little.
Q. You didn't think that the property you located,
and those thirty-two other people located, belonged
to McMurtry, did you? A. No, I did not. I didn't
know the standing, that is, my exact relationship
to these Columbus Oil properties. Q. And it was,
in fact, the Columbus — A. I don't mean the
Columbus. I mean the Pacific Oil Lands Company.
Q. You mean at the time you testified? A. Yes,
sir, when I made that statement. I am learning
more in this matter all along the line. Q. You did
not mean to infer then or now, do you, that the
properties which you located or any interest therein,
belonged to Mr. McMurtry, do you ? A. No, no, no.
No, I did not mean to infer that the other seven
locators with me had located for or on behalf of
McMurtry. I understood that he was not in it;
that he was in some other property that I didn't
know the name of. Am not acquainted with H. M.
Walker, H. E. Bashore, W. F. Christman, or Pentz
or Mahr. There are three persons in this company,
or in this matter that I have had an acquaintance
with, and that is Mr. Searls, Mr. McMurtry and

356 The [T>iifcrf States of America vs.

(Deposition of George W. Berry.)
Mr. Thorn. May possibly have met others but these
three are the only ones I have personal acquaint-
ance with, and what information I had came from
them. I turned the matter over into Mr. McMur-
try's hands when I gave him that power of attorney,
and I left it to his knowledge to do what he thought
was best concerning it. I knew nothing about oil.
[314—208]

Q. You mean for you? A. For me.

Certainly I would not have signed that power of
attorney of December 1907, if I had known that by
executing it, it would become an instrument in the
hands of anyone to unlawfully acquire the right of
possession to the public domain.

Now, I have my bank-book with me and find that
I deposited $1,000 on December 29, 1910, on Mc-
Murtry's notes to me. I have here a memorandum,
which I think correct, in which I say I received on
December 28, 1910, $1,000 on account, and there
being still due me $2,340.31. Then on September
18, 1911, I recieved $1,500. That memorandum was
made after I sold the Pacific Oil Land stock for
$250. I know because there is a memorandum of
that transaction. My bank-book shows that I de-
posited this $1,500 on September 21, 1911.

Mr. ACH. — In response to my question the gentle-
man produces a certificate of 4,000 shares of the
Columbus Midway Oil Company, No. 441, issued to
George W. Berry for 4,000 shares, bearing date the
26th day of September, 1911, signed Douglas S.
Watson, President, L. H. Jacobs, Secretary ; the cer-

California Midway Oil Company et at 357

(Deposition of George W. Berry.)
tificate announcing that this is a corporation organ-
ized under the laws of the State of California, in-
corporated June 18, 1910, capital stock $1,000,000,
one million shares.

Q. Now, that your deposit book is here, which
shows that a deposit was made on December 21,
1911, of $1,500, I present you your receipt for the
certificate of stock, certificate No. 32, a thousand
shares of the Pacific Oil Lands Company, dated De-
cember 18, 1911. Do you now remember if you had
that Pacific Oil Lands Company stock in your pos-
session at the time you were [315 — 209] paid the
$1,500, or whether you got the $1,500 before you got
the stock? A. Before I got the Pacific Oil Lands
Company stock ? Q. Yes, sir, whether it was before
or after, do you remember now ? A. You are speak-
ing now of whether I had that fifteen hundred pre-
vious? Q. Before or after you signed that receipt
for that stock? A. If I remember right, it must
have been afterwards the sum of $1,500, as that
amount was the last one I received.

Think I received this Columbus Midway stock
after I received the last payment on the note. I
think it was later because I think from a letter I
have here —

Q. Have you a letter here in reference to that?
A. Well, it is merely a personal letter from Mr.
Searls. I think it speaks of that stock.

Mr. ACH. — The letter reads as follows : It is on
the letter-head of William Baumgarten & Company,

358 The United States of America vs.

(Deposition of George W. Berry.)

323 Fifth Avenue, New York, and dated New York,

September 23d, 1911 :

"Dear Berry:

" Just a reminder for you, when you get home
and think of it, please sent me that old 'Empire'
stock so that I can get it out of the way. Mack left
Wednesday for home with everything in excellent
condition, so now we all look for results. A year or
two will mean MUCH. Your other stock is ordered
and ought to be here in another week or so, when I
will see that you get it. Also I will try and see
Pratt tomorrow, and see what he has to say" —

The WITNESS.— That is in reference to another
matter. Q. (Continuing reading:) "Put that
check in in time now, if not already in. Sincerely
yours, F. H. Searls."

Yes, this letter refreshes my memory as to the fact
that I and Searls had a meeting shortly prior to the
date of the letter. This reference to stock must have
the Columbus [316—210] Midway stock.

(Witness produces a letter which is marked Joint
Exhibit No. 1 which he states he received from L. B.
McMurtry, San Francisco, in the course of the
mails.)

Mr. ACH. — The letter which you hand me is dated
May 15, 1910, after being addressed to you as "My
dear Mr. Berry," states as follows:

"We expect any day now to be able to pay
off all of the old accounts, and take up all stock
sold, with interest. Secretary Ballanger is
making some trouble for us. If it had not been

California Midway Oil Company et al. 359

for him, you would have had your money before
this. You were sure of getting it within two
or three months.' '
* * * Is it not a fact that that referred to the
Empire stock which you held at that time as secur-
ity ? In other words, isn't it a fact that you did not
have any other stock in any other oil company with
which Mr. McMurtry was connected on that date?
A. Why, it must have been Empire stock, but what
that refers to mostly is to the matter of those notes
in which I was most interested. Q. * * * That
was in response to your demand for the payment
of the McMurtry notes? A. That was what it was.
Q. Have you any other letters from Mr. Searls?
A. (Witness produces letter.) Q. In answer to my
question you produce letter dated May 21, 1910,
signed Searls. A. Yes. (It is marked Joint Ex-
hibit 2 and reads as follows:)

"Your note received. I have tried to get
down to see you, but this is such a slave position
and you so far away, I can't make it. I called
you on the phone this afternoon, but no answer,
closed, I guess. I had a letter from Mack this
morning. He says a couple more [317 — 211]
months, maybe sooner, will fix things up with
him, and he can clean the slate, and my advice
to you is to try to be patient a little longer. I
know it is hard, but I am so sure of the outcome
that I can't help but advise you to rest on your
oars. Things will surely come our way, so sit
tight and saw wood."

360 The United States of America vs.

(Deposition of George W. Berry.)

Q. I see this communication is dated at the top,
"323 Fifth Avenue." That is where this gentleman
was working at that time? A. Yes, New York City.
Q. Then he winds up in this letter, " Regards to
Mrs. B. Mack's address is 1325 Green Street,
S. F., Calif." A. Yes. Q. Have you any other
letters from McMurtry or Searls ? A. No, not that
I can find.

Redirect Examination.
Q. I invite your attention now to letter marked
Joint Exhibit No. 2. How did Mr. Searls come, if
you know, to write that letter to you? A. Why, I
asked him about the payment of the note, or notes,
whichever they were at that time, and that was his
answer. I asked him also if I could not write to
McMurtry, and that wras wThat he gave me his ad-
dress for at the bottom of the letter. Q. Did you
afterward write to McMurtry for the notes? A. I
did. Q. Is the letter which was marked Joint Ex-
hibit No. 1 the answer which you received from
McMurtry? A. I believe it was. I had received
two letters from McMurtry. That is all I ever re-
ceived. I do not think, I do not know wrhat is con-
tained in the other one, and whether this is the
answer or the other, I do not know. I think this
is the first one, though.

Recross-examination.
Q. Well, this is the fact, isn't it, that you received
from McMurtry, directly or indirectly, $1,000 in
money or check, December 28, 1910, and $1,500 Sep-

California Midway Oil Company et al. 361

(Deposition of George W. Berry.)
tember 18, 1911, and the Columbus Midway stock
in payment of that debt against McMurtry? A.
Yes. [318—212]

Q. And that afterwards in connection with this
transaction you received $250 for the sale of the
Pacific Oil Lands Company stock; isn't that cor-
rect? A. Yes. [319—213]

Deposition of Julius W. Pentz, for Plaintiff.

JULIUS W. PENTZ, called April 20, 1917, on
behalf of the plaintiff, testified by deposition as fol-
lows :

Am a publisher and reside at Hempstead, Long
Island. Resided in New York City in December,
1907, and was a publisher at 299 Broadway. Never
lived in California. Was not acquainted with L. B.
McMurtry in December, 1907, and don't remember
knowing F. H. Searls and J. B. Thickens; knew C.
W. Thorn.

Q. The records of Kern County disclose that J.
W. Pentz and others appeared on December 18,
1907, before Samuel C. Worthen (substance of
Plaintiff's Exhibit 7). Are you the J. W. Pentz
who executed that instrument? A. I think I am;
yes, sir. I remember that Mr. Thorn came into my
office and said that there were a number of other
men who were willing to stake out some mining
claim or oil land claims, rather, in California, and
that by getting my signature the thing might develop
into something valuable for me. That is as far as
I can remember. Was not then or now familiar

362 The United States of America vs.

(Deposition of Julius W. Pentz.)
with the mining laws of the United States; probably
had a vague idea of what rights a citizen might have
under the circumstances. Had the idea that if I
and other parties became interested in any oil lands
or mining claims of any kind, that the Government
would protect our rights against fraud or infring-
ing upon our rights. Had had no business relations
with Thorn prior to that time. He was connected
with the Empire Oil Company, located on the same
floor in the Barclay Building, No. 299 Broadway,
and was in our office and had seen him, in our office,
perhaps all during that time and we were there
about six years in that building. Think I signed
the power of attorney in my office at the time he
first mentioned it to me. [320 — 214] Think a
Daniel W. Darling, who had a desk in our office,
was present and think he was the man who intro-
duced me to Thorn. Don't remember that Darling
signed the power of attorney in my presence. Don't
remember S. H. Freeman, J, F. Harder, F. H.
Searls or Frank D. Taylor. Think I recall seeing
PowTell afterward with Darling and Thorn. Don't
remember the next paper I signed in this connec-
tion. Think I signed others, but don't remember
the nature of them.

(Plaintiff's Exhibit 17, being a photographic copy
of the ratification, shown witness.)

That looks like my writing, it must have been
brought into our office by Thorn. Don't remember
what he said. Don't remember even the substance
of what he said. I must have read it before signing

California Midway Oil Company et ah 363

(Deposition of Julius W. Pentz.)
it. Don't remember that I made any inquiries of
Thorn as to why he wanted me to sign it. Did not
then know how many locations had been placed
upon public lands in California under my name.
Made no inquiry as to the number of claims or as to
the value of any lands located by the use of my
name. Darling died subsequent to May, 1913, can-
not say just when. Don't recall wrhen I next heard
anything about these oil land transactions, but I
know I received some shares of stock from Mr.
Thorn.

Q. I invite your attention now7, Mr. Pentz, to a
check which is, in substance, as follows : Check No.
160. New York, September 11, 1911. Second Na-
tional Bank of the City of New York. Pay to the
order of H. W. Pentz, two hundred and fifty dol-
lars. ($250.00.) (Signed) P. H. Searls. And on
the reverse side thereof is the following in type-
writing :

" Received from L. B. McMurtry, $250.00 in
full payment for all my right, title and interest
in and to all lands located by said L. B. Mc-
Murtry, on my behalf, in Kern [321—215]
County, California, pursuant to a power of at-
torney made by myself and others to said L. B.
McMurtry, bearing date the 18th day of De-
cember, 1907."
And right underneath that typewriting which I
have read to you is your signature, "J. W. Pentz."
And written just below that is the name of C. W.
Thorn and F. H. Searls. Is that your signature

,°>t>4 The United States of America vs.

(Deposition of Julius W. Pentz.)
to that typewriting, or just underneath that type-
writing (showing witness) ? A. Yes, sir. Q. On
the back of this check? A. Yes, sir. Q. Do you
remember when you received thaf check ? A. No,
sir. Q. Look at the date of it and see if that re-
freshes your memory any (showing witness) ? A.
This may have been given to me at the time Mr.
Thorn gave me the shares of stock, but I am not
sure about it now. Q. Who gave you this check?
A. Mr. Thorn, I think. Q. What did you do with
the check after you had endorsed your name, J. W.
Pentz, on the back of it? A. Mr. Thorn took it,
and I think he gave me some stock for it, or did
something with it.

Received no cash by reason or endorsing that
check. The stock certificate that I received was one
for 1,000 shares in the Pacific Oil Lands Company,
and the other one was for 750 shares, I think, in the
Columbus Midway, or some such name as that. I
had a sort of mixed up idea of the whole affair — I
don't know7 how to express it — but it seemed to me
that the shares were given to me because I had,
through Mr. McMurtry, staked out some oil lands
in certain places along there, and it seemed to give
them, it seemed to help them to stake out more oil
lands, or continue with the business, or something
of the kind. Certificate No. 21 of the Pacific Oil
Lands Company looks like the one that Thorn gave
me at that time. The receipt attached thereto, dated
September 16, 1911, bears my signature. [322 —
216] Don't remember signing it. It was probably

California Midway Oil Company et al. 365

(Deposition of Julius W. Pentz.)
presented at the time the certificate was given to
me. The next I recall in this matter was two Secret
Service men came into my office in the Woolworth
Building. It may have been in October, 1913. I
heard their names but don't remember them. They
showed me their badges. The next I recall in this
oil land transaction Mr. Thorn came in, but how
soon after, I don't remember, and he said to me,
"Do you remember the time when I gave you two
certificates of stock?" And I said, "Yes," and he
said, "Well," he said to me, "at the time when you
received those you promised to sell those back to us
for $500," and as he said so, he pulled out five one-
hundred dollars bills and as he did so he said, "Here
is your money. Would you mind getting your
stock?" And I said, "Must I do it now? I am too
busy to bother now, but rather than to get into a
fight a'bout it, I will get you the certificate of stock,"
and I secured the certificates from the deposit box
and handed him the stock and he gave me the
money."

Q. Do you remember on the other visit that you
promised to surrender it for $500 to Mr. Thorn?
A. Absolutely not.

(Witness identifies signature on Plaintiff's Ex-
hibit 18.)

That must have been presented to me by Thorn.
Don't remember the conversation at the time. I
signed it for the same reason I signed the other
papers. The oil lands had been staked out and also
I had my doubts about it and being somewhat of a

3G6 TJic United States of America vs.

(Deposition of Julius W. Pentz.)

gambler, I thought the thing might turn out all

right after a while.

(Identifies signature on Government's Exhibit
19.)

(Plaintiff's Exhibit 17 read in evidence with the
deposition and is as follows:) [323 — 217]

(This is a ratification similar in form to Plain-
tiff's Exhibit 1 with the deposition of Frank B.
Chapman and purports to have been executed by
J. W. Pentz, August 16, 1910.) [324—218]

(Plaintiff's Exhibit 18 with this deposition is
a proxy similar in form to Plaintiff's Exhibit 5
with the deposition of Frank B. Chapman, and pur-
ports to have been executed by J. W. Pentz, August
12, 1913.) [325—219]

(Plaintiff's Exhibit 19 with this deposition is a
consent to dividends similar in form to Plaintiff's
Exhibit 6 with the deposition of Frank B. Chapman,
and purports to have been signed by J. W. Pentz,
December 9, 1913.) [326—220]

Q. I now invite your attention to a check, in
substance as follows:

"San Francisco, 1/8/1914. No. 1187. The

Bank of California National Association, San

Francisco. Pay to the order of J. W. Pentz,

$20.00."

That check is signed, "Pacific Oil Lands Co., by

F. E. Harrison, Secretary and Treasurer."

It is also signed, "L. B. McMurtry, Vice-Presi-
dent." Endorsed on the back thereof in a rubber
stamp is the following :

California Midway Oil Company et al. 367

(Deposition of Julius W. Pentz.)

"Pay to the order of The National Nassau
Bank of New York." And right underneath
that rubber stamp is the name, "J. W. Pentz."

That is my signature on the back of that check.
Received it from California by mail and deposited
it in my bank to my own credit. After surrender-
ing this certificate No. 21 to Thorn and receiving
$500, received no other money, on account of the
fact that I held said certificate No. 21 on account of
any of these oil transactions. When I surrendered
this certificate I did not know nor had I been in-
formed how many times my name had been placed
on oil land locations in California, or what rights
in oil lands had been located in that State 'by Mc-
Murtry acting under the power of attorney which
I signed in December, 1907, nor had I any knowl-
edge whatever of the assets or resources of the Pa-
cific Oil Lands Company, nor did I have any knowl-
edge with respect to the transactions concerning
these oil land matters that had been carried on by
Mr. McMurtry acting under this power of attorney.
As far as I can remember. Well, I tell you at the
time this was surrendered, I was very much en-
grossed in my own business and looked upon this as
a sort of a side issue, and I paid very little atten-
tion to what transpired in this transaction. No,
since the surrendering [327—221] of that certifi-
cate I have not claimed any interest in the lands
that were located under this power of attorney.

Q. Do you claim any interest in any such lands?
A. Why, I suppose I have a right to. Think this

368 The United States of America vs.

(Deposition of Julius W. Pentz.)
certificate showed the capital stock of the company.
I don't remember the exact amount. Do not know
who the other stockholders were when I surrendered
the certificate. Never made any inquiry to ascer-
tain the number of locations on which my name
appeared or the value or extent of any oil lands in
California upon which my name appeared as a lo-
cator that I remember. Never was called upon for
money in the development of these oil lands, nor
did I know at the time I surrendered this certifi-
cate the state of the development of the lands. Did
not remember whether any representations were
made at the time I signed the power of attorney
as to what expenses I would be compelled to bear,
if any, in the development of any oil land that
might be located. Never knew McMurtry person-
ally.

Q. I now invite your attention to a paper, or three
sheets of typewritten matter, which are headed,
"Pacific Oil Lands Company. First Report to
Stockholders." In the upper right-hand corner, in
pencil, is "Jan. 1914," and in the upper left-hand
corner the initials, "H. A." and "F. H." Please
examine that. A. I do not remember ever having
"seen this. Q. Have you ever been interviewed by
any special agents of the Government in this mat-
ter? A. Yes, I reported this, that two men came
into my office in the Woolworth Building. Q. Have
you ever had any conferences, recently, with Mr.
C. W. Thorn in regard to these matters? A. No,
sir — yes> Mr. Thorn was in my office with Mr.
Brann, —

California Midway Oil Company et al. 369

(Deposition of Julius W. Pentz.)

They were in my office on Saturday morning.
[328—222]

Q. I mean during the year 1916, did you have any
conferences with Mr. Thorn? A. I think Mr.
Thorn was in my office last — it may have been the
middle of the year in 1916; suggesting that, — Q.
Did he say anything to you at that time about these
oil matters, these oil lands? A. He asked me if I
could not spare the time to go down there and live
on those lands.

Mr. ACH.— Live on them?

The WITNESS.— He said live on them, whatever
it was — I don't remember now.

Q. To what lands do you refer? A. These oil
lands.

Cross-examination.

Have been in the publishing business about 14
years. Now publish the " Hardware Review." It
is a corporation. I have the controlling interests.
In December, 1907, I was on the thirteenth floor of
the Barclay Building, 299 Broadway. The Empire
Oil Company office, if I remember rightly, was on
the same floor. Don't remember ever knowing
F. H. Harder, S. H. Freeman or F. H. Searls. In
1907, my salary was seventy-five dollars a week.
Think it was the same in September, 1911. In
September, 1914, it was one hundred dollars a week.
Before becoming interested in the publishing busi-
ness was a stenographer and clerk, law and commer-
cial. Was in a law office about two years, in which
time I prepared papers. I knew the purpose and

370 The United States of America vs.

(Deposition of Julius W. Pentz.)
effect of an acknowledgment before a notary public.
Fes, my experience was such that I always read
over a paper before I signed it. The money I in-
vested in the publishing business was money I had
saved from my earnings. Did not always rely en-
tirely upon my own judgment in signing papers. In
this transaction I relied on what Mr. Thorn told us
about this matter. Had confidence in him, in a way
I did. [329 — 223] Had no business transaction
with him before signing this power of attorney.
Mr. Darling had a desk in our office. . He and Mr.
Elliott were very friendly with him and once in
awhile Thorn would come in and talk with Darling
and Elliott, and when this first power of attorney
was presented, and the other fellows thinking it was
all right, why I merely read the thing over and
signed it. Oh, yes, I knew it was the power of at-
torney. Talked it over casually with Darling and
Elliott, but don't suppose I made any special effort.
They thought it might be a good thing to own some
oil land and this was done for that purpose. To
tell you the truth, my feelings were rather mixed in
the matter. I had my doubts because of the Empire
Oil Company going out of business, and this com-
pany being organized to stake out more lands, and I
had my doubts whether the thing might prove profit-
able. Nevertheless, I signed it, being a gambler,
somewThat, Yes, it was my intention in signing the
power of attorney, to acquire and own some of those
oil lands, but I still had doubts in my mind. Never
talked with Mr. McMurtry about the matter at all.

California Midway Oil Company et al. 371

(Deposition of Julius W. Pentz.)
The only persons that I talked with were Darling,
Elliott, and Thorn. Darling was acquainted with
McMurtry, he said, before signing the power of at-
torney. Don't remember what he said concerning
Mr. McMurtry. Yes, he said that he had been ad-
vised that Mr. McMurtry was going out to Cali-
fornia to try and find some Government land that
could be located for oil. Don't remember that he
said he got this information from Thorn or Mc-
Murtry. No one ever asked me to sign any agree-
ment to the effect that whatever lands were located
in my name in California would belong to anybody
else. Don't remember that Darling said that he had
agreed that any lands located in his name would be
given in whole or in part [330 — 224] to anyone
else. Yes, I knew^ at the time of signing this power
of attorney that a citizen of the United States,
under the lawTs, had a right to locate mining lands
that belonged to the Government. Was not advised
before signing this power of attorney that Mc-
Murtry had a large experience in the oil business
and was acquainted with Government lands in Cali-
fornia. Don't remember that anyone ever said that
his name was put in because he was supposed to go
out to California, and stake out the lands, that he
had some knowledge of the oil business and the pros-
pects out there was implied. At the time I signed
the power of attorney no one promised to pay me
any money for it, or give me anything for my sig-
nature to the powrer of attorney. The only promise

372 The United States of America vs.

(Deposition of Julius W. Pentz.)

was made by Mr. Thorn that the thing might turn

out to be valuable.

The letter which came with the check for $20.00 is
the only other letter I recall receiving from the Pa-
cific Oil Lands Company. After signing this power
of attorney at the request of Thorn he gave me an-
other paper to sign. Don't know whether it was a
power of attorney or not. Never communicated
with McMurtry or wrote any letters to Thorn. I
understand the language of the power of attorney
as read and I read it at the time I signed it. Yes,
understood that it gave McMurtry right not only to
locate mining claims and improve the same, but also
to sell or mortgage all the same or part thereof, and
that this specifically applied to oil lands in Cali-
fornia. Don't remember ever signing any paper
modifying or repudiating the power of attorney.
If I could see any document to that effect, I might
refresh my memory, but offhand, I don't know.
There may have been one. The special agent of the
land office interviewed me, it may have been about
1913 or 1914. [331—225] Don't remember how
long before that it was that I had seen Thorn. Had
not had any reports from the Pacific Oil Lands
Company, Thorn, Darling or Elliott, of and con-
cerning what McMurtry had done in California
under the power or attorney. Don't recall having
had any report at all of the transaction. Don't re-
member that Thorn had told me that McMurtry had
acted in the matter prior to the visit of the special
agents. The only thing I recall having received be-

California Midway Oil Company et al. 373

(Deposition of Julius W. Pentz.)
fore that was the $20.00 dividend check. Yes, I
held the stock then and knew it came to me as the
result of my connection with McMurtry, but no one
had told me that McMurtrv had located lands and
caused them to be transferred to the Pacific Oil
Lands Company. No one had told me that. Thorn
gave me the stock. Don't remember just what he
said. I certainly was acting in good faith without
intent to injure anybody when I received that check
and receipted for the stock. Was acting in good
faith wThen I signed the ratification (Government's
Exhibit 17). I read that at the time I signed it and
understood it before acknowledging.

Q. This ratification also contains this statement
by you: " Signed, sealed and acknowledged" — after
you read it and understood it — "I do hereby ratify,
approve and confirm those certain contracts of sale
made for me and in my name with L. B. McMurtry,
as my said attorney in fact,"

Now, Mr. Pentz, you knew at that time that it w7as
represented to you that some w7ay or some how, by
somebody, and by this instrument that you were
asked to sign, that McMurtry had acted upon the
powers of attorney, and had recorded them, and for
you, and in your name, and as your attorney in fact,
made contracts of sale, and that you were ratifying
and approving those contracts by putting your name
there, didn't you? [332—226] A. Well, Mr.
Thorn, he evidently must have presented this thing
to me for signature, and he might have told me at
the time what thing was for. Of course, I was en-

374 The United States of America vs.

(Deposition of Julius W. Pentz.)
grossed in my own business, and I don't suppose I
paid very much attention to that, feeling that this
instrument was a part of what had already been
done, and simply a sort of a link in the chain of ac-
quiring the oil lands, or whatever they were after.

Mr. ACH. — I move to strike the answer out as
not responsive to the question. Please read the
question to the witness again, and I will ask the wit-
ness to please give me a direct answer.

(Question read to the witness.)

A. Well, I don't know how to answer that, for the
reason that I may have been, I was, then, very much
engrossed in my own business, and this may have
been presented by Mr. Thorn, and I signed it, and
he may have made some explanation as to the rea-
son why it should be signed, and so forth. Q. But
you saw, Mr. Pentz, as a man of affairs, with the ex-
perience you have had, that you were ratifying, by
your signature, mining contracts made in your be-
half by your attorney in fact, Mr. McMurtry, for
the sale of something? A. Yes, I don't deny that.
Q. You would not have done that unless you had
some information on it, would you? A. I don't
know how to answer the question for the reason
that this paper may have been presented by Mr.
Thorn, as the others were, and believing that they
were engaged in staking out oil lands, I presume I
signed it, and paid no further attention to it. Q.
You believed at that time that Mr. McMurtry and
Mr. Thorn were taking care of your interests in the
matter, and you were ratifying the acts that they

California Mid way Oil Company et al. 375

(Deposition of Julius W. Pentz.)
were doing on your behalf. A. Yes. Yes, in sign-
ing the ratification I must have known that these
people were asking me to ratify something that Mc-
Murtry [333—227] had done in California. I
don't remember what passed between the special
agent and myself or whether McMurtry's name was
mentioned. Recall only four interviews with Thorn
in this matter. The first time when I signed the
power of attorney, the second time a year or two
later, I think when he asked me to sign this ratifica-
tion, or whatever you call it. I saw Thorn occa-
sionally on the floor there in the meantime, but
nothing was said about this matter that I recall.
While I was in possession of the Pacific Oil Land
Company stock I remember reading something about
the Southern Pacific being in trouble about having
some trouble about having some of these lands, and
the Government trying to reclaim or get them away
from them — something to that effect. I don't know
whether it was on mine or not.

Q. But, as to this land, didn't Mr. Thorn say to
you at any time, in your talks with him on the sub-
ject, that the Government had withdrawn these
lands, and was about to commence suit to recover
these lands'? A. He was in my office at the Wool-
worth Building, at one time, and he asked me, if I
remember rightly, whether I would be willing to live
on these lands in order to verify the claims, but
when that was, I don't remember, though.

He simply said would I be willing to go out there
and live on the land, that he expected to get some

376 The United States of America vs.

(Deposition of Julius W. Pentz.)
others to go, and would like to have me join the
crowd, and live on the land. Don't remember ex-
actly when this was. I suppose the lands he re-
ferred to were oil lands, though he did not say any-
thing about that or how far they were from San
Francisco. He said they were in Kern County,
that is all we knew. I did not accept the proposi-
tion and he did not go into details. Don't remem-
ber the circumstances under which I received the
stock in the Columbus Midway Oil Company. It
was one certificate for 750 shares, I think. [334 —
228] Gave it back to Thorn from whom I received
it as well as the certificate of stock in the Pacific Oil
Lands Company. Thorn never gave me any money
nor promised me any while he said this thing might
turn out to be very valuable referring to the stock.
Yes, when he gave me the stock he said something
about it representing my interest in the lands lo-
cated and in the contracts that I had ratified, and
that he thought it might turn out to be very valu-
able.

Q. Nowt, you seem to have forgotten, notwithstand-
ing the fact that you were interrogated about it by
my friend Mr. Hall, that on or about September 11,
1911, you endorsed this check for $250, payable to
your order, and signed by F. H. Searls. If you will
kindly turn it over, the endorsement is upon the
back. Now, isn't it true that at the time you got
this certificate of stock of the Pacific Oil Lands
Company, that Mr. Thorn also gave you or pre-
sented to you that check of $250, and told you that

California Midway Oil Company et al. 377

(Deposition of Julius W. Pentz.)
that was a part of the money which the locators and
each and all of them were receiving, realized out of
those contracts, and that he had some Columbus
Midway stock, and that he could give you 750 shares
of that stock for $250, and advised you to buy it,
and he said he thought you wrould make a sum of
money out of it, — isn't that true? A. That may
have been the wTay in wThich I secured the Columbus
Midway stock. Q. Isn't that true? A. It may
have been. Q. Don't you kind of remember it that
way, now that I put it to you? A. Yes. Q. Now,
is it not true also that at that time he told you that
in addition to the $250, that all these lands and con-
tracts, or something like that, had been put into a
corporation by Mr. McMurtry, as your agent, in
order to better handle the matter and that therefore
they desired that you should sign that transfer over
to McMurtry, who had already [335—229] formed
this thing into the Pacific Oil Lands Company, as
your agent, and taken the stock, isn't that true?
A. It may have been true. Q. Don't you remem-
ber it now, or something to that effect? A. Well,
that probably wTas the method of procedure, but I
can't now7 swTear it wras. Q. I am not asking you
to swear to it as the method of procedure. I am
asking you now whether there is not an impression
come into your mind that that, or something to that
effect, w7as said by Mr. Thorn to you at that time?
A. I suppose there was. Q. Does not the mere ask-
ing of the question suggest to your mind that there
was something of that kind said to you by Mr.

378 The United States of America vs.

(Deposition of Julius W. Pentz.)
Thorn at that time? A. Yes. * * * Q. You
heard Mr. Hall state that it was in August, 1913,
that this interview is said to have occurred, and you
just said that it may have been as long as two years
after you moved into the Woolworth Building.
You are not very good in your memory as to hap-
penings and facts, are you, Mr. Pentz? A. No, sir,
not in this business. Q. What? A. Not in this
affair. Q. Now, the next question will be : Can you
remember what took Mr. Thorn into your office, — I
mean, of course, what business took him in your new
offices in the Woolworth Building. Do you under-
stand the question ? A. Yes, I understand the ques-
tion. I think it was about these oil lands, about
proving my claim, and about living out there, as I
said before. That may have been it, but I do not
recollect now. Q. The fact of the matter is that he
talked so much about oil lands, and different things
in connection with these oil lands, at the various
times that he came to see you, that you as a matter
of fact did not pay much attention to what he told
you? A. No, sir, I was engrossed with my own
business. Q. That is true, that you did not pay
much attention to what he told you about it? A.
Yes. Q. Just a little [336 — 230] impression that
you got now and then? A. Yes. Q. Well, you
took the results, whatever they might be, such things
that were coming to you by reason of the location of
these oil lands, or whatever was located, by Mr. Mc-
Murtry? A. Yes. Q. And you did not think that
Mr. McMurtry or Mr. Thorn or anyone connected

California Midway Oil Company et al. 379

(Deposition of Julius W. Pentz.)
with the location of these lands, had deprived you of
a single thing that was coming to you by reason of
your having located these lands through Mr. Mc-
Murtry? A. No, sir. Yes, I read Plaintiff's Ex-
hibit 18 before signing and knew what it was.
Thorn asked me to sign that. He didn't say much
of anything except that he asked for my signature
to appoint Mr. McMurtry my proxy. He did not
explain, to the best of my recollection. Yes, I re-
ceived Government's Exhibit 19 through the mail
from San Francisco, with request that I sign it, and
that there would be a dividend coming to me as a
stockholder in the Pacific Oil Lands Company.
Yes, this check No. 1187, dated January 8, 1914, for
$20.00 bears my endorsement.

Q. Now, I showT you a letter marked Defendant's
Exhibit "D," being a letter written on the letter-
head of the Pacific Oil Lands Company, dated Jan-
uary 8th, 1914, reading as follows:
"Dear Sir:

Enclosed you will please find dividend check for
$20.00, same representing your pro rata of the first
distribution to the stockholders of the company of
cash assets amounting to $20,000, and to which dis-
tribution we hold your written consent.

Accompanying this letter you will also find a
statement covering the affairs of the company.
This also, we feel sure, will prove of great interest
to every stockholder.

380 The United States of America vs.

(Deposition of Julius W. Pentz.)

Wishing you a very happy and prosperous 1914,
[337 — 231] we beg to remain,

Very truly yours,
PACIFIC OIL LANDS COMPANY,
• By P. E. HARRISON,

Secretary."

Didn't you receive a letter identical with that,
with your $20.00 check? A. I think I did. Q. And
is it not equally true that enclosed in that letter
with that check, there was a copy of the statement
marked with the initials H. A., and the initials
F. H., dated January 1914, Pacific Oil Lands Com-
pany, First Report to Stockholders. Isn't it true
that that statement was included in that envelope
and that you received it? A. I remember a state-
ment was inclosed, but whether this was the one, I
don't remember.

Yes, I read the statement. Presume I destroyed
all the letters, reports, etc., in writing, which I re-
ceived in this matter, as I have looked and been un-
able to find any. After I sold my stock I paid no
attention to what had preceded that. When I sold
this stock to Thorn he said to me, "You remember
that when I gave you this stock, that you promised
you would let me have it back for $500. Here is
your money." That was in 1914. That is all I can
remember, that he said, — he tried to recall to my
mind the giving of the stock to me, the 1000 shares
of the Midway Oil Company stock, and the other,
and he said, "You remember promising me that if
I wanted to buy this back, you would let me have it

California Midway Oil Company et ah 381

(Deposition of Julius W. Pentz.)
for $500/' or something to that effect.

Q. Wasn't that the Columbus Midway Oil Com-
pany stock that you bought for $250, and he told you
at the time that he sold it to you for $250, and when
he gave you that check, that if at any time you wanted
to sell it back, and that if he wanted to take it back
for $500, you would sell him that 750 shares of Co-
lumbus [338 — 232] Midway Company stock — isn't
that true? A. No, sir, he took back both certifi-
cates. Q. No matter what he took, isn't what I told
you true? A. I don't remember. Q. You will not
dispute it, wrill you? A. I can't tell, because my
memory fails me. Q. Did you advise with anybody
else before concluding to take this $500 and giving
him this stock? A. No, sir. Q. As you now re-
member, you mean that you never did make the
promise to Mr. Thorn that you would ever sell the
stock to him for $500. A. Absolutely not. Q. He
did not deliver this stock in the Pacific Oil Lands
Company, to you, the 1000 shares, upon the condi-
tion that you would sell it to him for $500 at any
time, did he? A. No, sir. I gave him the stock
and received $500 in cash in my office all at one
interview; there had been no previous talk about it.
I then had the stock in my office where I have kept
it since having been interviewed by the Secret Ser-
vice men. Did not mention to Thorn this interview
by the Secret Service men. Thorn did not tell me
what he was going to do with the stock or for whom
he was buying it. I did not ask him. Did not ask
him what had become of the contracts which had

382 The United States of America vs.

(Deposition of S'amuel R. Banks.)
been ratified in 1910, or what had become of the
locations which had been made in my name nor did
he tell me. [339—233]

Deposition of Samuel R. Banks, for Plaintiif.

SAMUEL R. BANKS, called on behalf of the
plaintiff, February 20, 1919, testified by deposition
as follows:

Reside at 531 West 159th Street, New York
City. Am thirty years of age. At the present time
I have concessions at the " Billy" Sunday Taber-
nacle. I have been a clerk in the office of Myers &
Clark, an employee of the United States, and of the
city of New York as a standardization salary expert.
Resided at the same place in December, 1907.
Think I was a salesman with the Pittsburg Reduc-
tion Company, at 99 John Street. Have known
Frank R. Searls socially for about eleven years.

I am the Samuel R. Banks whose name appears
as having signed that power of attorney (Plain-
tiff's Exhibit 5).

C. W. Thorn, whom I had known three or four
years, talked about some act of the Government
about these lands out there in California, and said
something about it was in my jurisdiction, being
of age, that I had the privilege of locating some of
this land. I brought up the question as to whether
I had to be a resident in California, or whether
I had to know anything about the land in particular
to make a location, to become a locator, and he said
no. Yes, I knew L. B. McMurtry. Had met him

California Midway Oil Company et al. 383

(Deposition of Samuel R. Banks.)
about a year before. Had had no business dealings
with him or with any of the oil companies in which
he was interested. Thorn advised me of my rights.
(Other names on the power read.) Did not know
any of those persons. Quite a wThile [340 — 234]
later Thorn told me that they had started to sink
a shaft, or well.

Q. Did you ever sign any papers after you signed
this first paper we have been talking about? A.
Yes. Q. When was that that you signed the next
paper? A. When I gave the power of attorney to
Mr. McMurtry. Q. I now invite your attention to
a paper marked Government's Exhibit No. 21, pur-
porting to have been signed on the 15th day of
August, 1910, by Samuel R. Banks. This, I will
explain to you, is merel ya photographic copy of
the original paper. Do you recognize that as a
photograph of your signature to the paper which
you signed? A. I signed the paper.

I was called down town, — no, I received a letter,
I think it was, — I am not positive about it, — and I
am also not positive of whether Mr. Thorn or Mr.
McMurtry was present at the time. I do know one
of the two was. To the best of my recollection, I
think it was at one of the hotels herein this city,
that it was signed. I was asked, if I was willing to
sign to Mr. McMurtry the power of attorney, that is
the power of attorney to him, to put in force, or
to enforce the location of lands out there, — some-
thing to that effect. I don't recollect just the con-
versation, but otherwise that if I would give my

384 The United States of America vs.

(Deposition of Samuel R. Banks.)

power of attorney to him, he would do the work

for me. Believe I read the paper at that time.

Q. You will observe that this paper reads as fol-
lows: "I do hereby ratify, approve and confirm those
certain contracts of sale made for me in my name
by L. B. McMurtry, as my said attorney in fact,
with W. F. Herrin, et al., of date the 4th day of
August, 1910. A. Yes. Q. Did you at that time
learn anything about this contract dated August 4,
1910? A. Regarding [341—235] the land out
there, you mean? Q. Yes, or no, I don't mean re-
garding the land, I mean regarding the contents of
this contract dated August 4, 1910. A. I have a
kind of hazy recollection that something was said
about it. Q. Please tell me what was said? A. I
don't know what particularly was said about it,
but I do know there was something said regarding
the properties or the lands.

(Plaintiff's Exhibit 21 with this deposition is a
ratification similar in form to Plaintiff's Exhibit 1
with the deposition of Frank B. Chapman, and pur-
ports to have been executed by Samuel R. Banks,
August 16th, 1910.) [342—236] *,

Internet Archive Audio

Featured

Top

Images

Featured

Top

Software

Featured

Top

Books

Featured

Top

Video

Featured

Top

Mobile Apps

Browser Extensions

Archive-It Subscription

Save Page Now

Full text of "Records and briefs of the United States Circuit Court of Appeals for the Ninth Circuit"

See other formats